Netflix Inc (NFLX.O) has adopted a poison pill defense against a hostile takeover, it said on Monday, days after activist investor Carl Icahn disclosed a stake in the video rental company.
Shares of Netflix fell 1.3 percent to $75.90 in early Nasdaq trading.
The shareholder rights plan is aimed at preventing an outsider not approved by the Netflix board 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.
On Wednesday, Icahn disclosed that he had amassed control of 10 percent of Netflix shares, but most of his purchases were in the form of call options. The billionaire, who is known for shaking up management, said he saw Netflix as an attractive takeover target for a number of companies.
The shareholder rights plan is not intended to interfere with any merger, tender or exchange offer, or other business combination approved by the board, Netflix said in a statement.
(Reporting by Lisa Richwine in Los Angeles and Sruthi Ramakrishnan in Bangalore; Editing by Saumyadeb Chakrabarty and Lisa Von Ahn)