Intertain Group has approved a new shareholder rights plan in an effort to give the company adequate time to consider unsolicited takeover bids.
The new rights plan will enable the company and its shareholders to evaluate any takeover bids for common shares, as well as provide its board with enough time to identify, develop and negotiate value-enhancing alternatives.
Subject to ratification by the company’s shareholders, Intertain said that the plan has been developed to prevent anyone from acquiring beneficial ownership of over 20% of the outstanding common shares of the company while its board’s process is ongoing, or from entering into similar agreements.
In order to implement the plan, Intertain’s board has authorised the issuance of rights to holders of its common shares at a rate of one right per share.
Rights will automatically attach to the common shares and no further action will be required by shareholders.
Any bid that meets certain criteria intended to protect the interest of the firm will be classed as a “permitted bid” and will not trigger the plan.
This criteria will include requirements such as the bid being made by the way of a circular to all holders of voting shares other than the offeror under the bid, and remain open for acceptance by shareholders for at least 60 days.
Should a bid not meet such criteria, the rights issued under the plan will entitle shareholders to purchase additional common shares of Intertain at a discount to the market price.
Intertain noted that it is not aware of any specific takeover bid for the company’s common shares.