A more thorough explanation:

Transactional takeover defense is a strategy used by corporations to prevent hostile takeover attempts. It involves financial or operational transactions that make it more difficult for a potential bidder to acquire the company. This can be done by raising the company's share price, paying off the bidder, or reducing their potential profit.

• Issuing new shares of stock: By increasing the number of shares available, the company can dilute the bidder's ownership and make it more expensive for them to acquire a controlling stake.
• Acquiring expensive assets: The company can use its cash reserves to purchase assets that are not essential to its operations but would be costly for a potential bidder to acquire.
• Poison pill defense: This involves creating a financial instrument, such as stock options or convertible bonds, that would become very expensive for the bidder to exercise if they were to acquire a controlling stake in the company.

These examples illustrate how a company can use financial and operational transactions to make it more difficult for a potential bidder to acquire the company. By raising the cost of acquisition, the company can discourage hostile takeover attempts and maintain control over its operations.