Williams Cos. ‘Unprecedented’ 5% Poison Pill Trigger Struck Down

The Williams Cos. board overreacted to threats posed by the Covid-19 pandemic when it adopted an anti-takeover “poison pill” triggered when any investor bloc reached a 5% ownership threshold, a Delaware judge ruled Friday, saying the “unprecedented” measure was “not proportional.”

Delaware law treats poison pills, the “nuclear weapons of corporate governance,” with “the delicacy they deserve,” but the Williams plan increases its “nuclear missile range by a considerable distance,” Vice Chancellor Kathaleen S. McCormick wrote in an 89-page ruling for Delaware’s Chancery Court.

The board members have “failed to show that this extreme, unprecedented collection of features bears a ...