U.S. broadcaster E.W. Scripps said Wednesday it has adopted a shareholder rights plan to give its board time to evaluate a $538 million bid from larger rival Sinclair and other options.

The rights plan, commonly known as a poison pill, aims at protecting shareholders against coercive tactics, Scripps said. 

It would come into effect if any investor amasses a stake exceeding 10%, allowing existing investors to buy additional Scripps shares at a 50% discount and diluting the stake of any hostile bidder.

A spokesperson for Sinclair said the company looks forward to continuing talks with Scripps, adding that the rationale of a deal was “indisputable.”

Sinclair disclosed last week it had built an 8.2% stake in Scripps and that it had been in deal talks for months. That was followed by its takeover bid on Monday.

A merger between the two would create a local media giant, a combined entity of more than 240 stations, and could run afoul of the Federal Communications Commission’s current national media ownership cap of 39% of U.S. households.

On Monday, doubts emerged over rival broadcaster Nexstar’s $3.54 billion offer for Tegna after President Donald Trump criticized a proposal to lift the current cap on local television station ownership.

The U.S. media industry is grappling with declining viewership and falling ad revenues, pressuring broadcasters.

Since Sinclair disclosed its stake in the company, Scripps’ shares have risen nearly 43%.

Descendants of founder Edward Scripps control about 93% of the Cincinnati, Ohio-based company’s voting shares, according to its annual report.

“The rights plan safeguards shareholders’ ability to receive appropriate value for their investment and ensures that the board can assess the recently received proposal, and any strategic alternatives, in a thoughtful and orderly manner,” Scripps board chair Kim Williams said.

Sinclair has said the combined company would feature an independent board with seats allocated based on ownership and include representation from the Sinclair and Scripps families.