Gunnar,

A larger shareholder could pruchase more shares if a hostile takeover were to occur but at a large cost. If they want to maintain a certain percentage of the shares outstanding they too would have to buy more. Also there is usualy a clause in the plan which prevents the bidder, or hostile acquirer from participating. Honestly, you hope that the shareholders right plan never has to be used because of the dilutional effect. It is more of a deterrent than anything else.

Johnyboy