Netflix has taken precautions against a potential hostile takeover bid by billionaire investor Carl Icahn by launching a "stockholder rights plan", the company said Monday in a statement.
Less than a week after activist investor Carl Icahn announced a 10 percent stake in Netflix, the online video company is moving to protect itself against hostile takeovers.
Icahn has said he invested in Netflix because he believes its stock is undervalued and that the company is well-positioned to play a leading role in the media landscape of the future.
"All the habits are changing. You're going to have distribution changing the whole entertainment business, and they have the greatest platform," Icahn told the Los Angeles Times.
The move is aimed at preventing an outsider who lacks Netflix board approval from accumulating a stake of 10 percent or more, the company said in a statement. The board approved the provision on Friday. It remains in effect for three years.
The plan is not intended to interfere with any merger, tender or exchange offer, or other business combination approved by the board, the company added.
Icahn replied on Monday, saying that "any poison pill without a shareholder vote is an example of poor corporate governance," according to CNN.
He called the 10 percent threshold "remarkably low," "discriminatory," and "particularly troubling." He also said that he believes Netflix's board holds too much sway over shareholders in general.
