crown-jewel option: meaning, definition, pronunciation and examples
C2Business, Corporate Finance, Mergers & Acquisitions (Formal)
Quick answer
What does “crown-jewel option” mean?
An anti-takeover strategy where a target company sells its most valuable assets to make itself less attractive to a hostile bidder.
Audio
Pronunciation
Definition
Meaning and Definition
An anti-takeover strategy where a target company sells its most valuable assets to make itself less attractive to a hostile bidder.
A defensive tactic employed by a company's management to thwart an unwanted takeover by disposing of the company's most prized and profitable assets or subsidiaries (the 'crown jewels'), thereby reducing the company's appeal and value to the acquiring party.
Dialectal Variation
British vs American Usage
Differences
The term is understood and used identically in both corporate finance contexts. Spelling of 'jewel' is consistent.
Connotations
In both varieties, it connotes a desperate, last-resort defensive measure that can be controversial, as it may destroy shareholder value to protect management.
Frequency
Slightly more frequent in American financial journalism due to the larger volume of M&A activity, but standard in UK financial discourse.
Grammar
How to Use “crown-jewel option” in a Sentence
The board [verb: exercised/activated] the crown-jewel option.Activating the crown-jewel option [verb: involves/requires] selling our prime assets.They defended themselves via the crown-jewel option.Vocabulary
Collocations
Examples
Examples of “crown-jewel option” in a Sentence
verb
British English
- The directors voted to crown-jewel the company by selling the flagship brand.
- They are crown-jewelling their assets to deter the predator.
American English
- Management threatened to crown-jewel the division to block the takeover.
- The CEO is prepared to crown-jewel the entire portfolio.
adverb
British English
- The company acted crown-jewel in its desperation.
- (Rarely used)
American English
- They reacted crown-jewel, selling everything of value.
- (Rarely used)
adjective
British English
- The crown-jewel strategy was debated for hours.
- They reviewed the crown-jewel provisions in the charter.
American English
- A crown-jewel defense clause was added to the bylaws.
- The board has a crown-jewel option plan in place.
Usage
Meaning in Context
Business
Primary context: 'Facing a hostile bid, the board considered the crown-jewel option of spinning off their lucrative tech division.'
Academic
Used in finance and business strategy papers analysing corporate governance and takeover defences.
Everyday
Virtually never used in everyday conversation.
Technical
Precise term in Mergers & Acquisitions (M&A) law and corporate finance.
Vocabulary
Synonyms of “crown-jewel option”
Strong
Neutral
Weak
Vocabulary
Antonyms of “crown-jewel option”
Watch out
Common Mistakes When Using “crown-jewel option”
- Using it as a general term for any good option ('This investment is the crown-jewel option').
- Confusing it with a 'golden parachute' (which is compensation for executives).
FAQ
Frequently Asked Questions
Yes, but it is often controversial and subject to scrutiny by regulators and shareholders, as it can be seen as management acting in its own interest rather than shareholders'.
The decision is made by the company's board of directors, often under intense pressure during a hostile takeover attempt.
The main risk is permanently harming the company by losing its most valuable revenue-generating assets, which can lead to long-term decline and shareholder lawsuits.
Typically, no. Once the prized asset is sold, it is usually gone permanently. The defence is designed to be a drastic and irreversible action.
An anti-takeover strategy where a target company sells its most valuable assets to make itself less attractive to a hostile bidder.
Crown-jewel option is usually business, corporate finance, mergers & acquisitions (formal) in register.
Crown-jewel option: in British English it is pronounced /ˌkraʊn ˈdʒuːəl ˌɒpʃən/, and in American English it is pronounced /ˌkraʊn ˈdʒuːəl ˌɑːpʃən/. Tap the audio buttons above to hear it.
Phrases
Idioms & Phrases
- “To pull the crown-jewel lever.”
- “To sacrifice the crown jewels.”
Learning
Memory Aids
Mnemonic
Imagine a king (the company) under siege. To make his castle (the company) worthless to the invaders (the bidders), he throws his crown's most precious jewel out of the window. The 'option' is his choice to do this.
Conceptual Metaphor
CORPORATE DEFENCE IS WARFARE / A COMPANY IS A KINGDOM (with valuable jewels).
Practice
Quiz
What is the primary purpose of a 'crown-jewel option'?