Barnes & Noble Education Adopts Short-Term Stockholder Rights Plan; The Rights Will Be Exercisable Only If A Person Or Group Acquires 10% Or More Of The Co's Outstanding Common Stock, Each Right Will Entitle Stockholders To Buy One One-Thousandth Of A Share Of A New Series Of Junior Participating Preferred Stock At An Exercise Price Of $5.00.
Portfolio Pulse from Benzinga Newsdesk
Barnes & Noble Education, Inc. (BNED) has announced the adoption of a short-term stockholder rights plan, designed to deter the acquisition of 10% or more of its outstanding common stock by any person or group. The plan includes a dividend distribution of one preferred share purchase right for each outstanding common share, exercisable at $5.00. These rights become exercisable only if a person or group acquires 10% or more of BNED's common stock, allowing other stockholders to purchase shares at a discount or the board to exchange shares for rights. The rights plan is effective until January 31, 2025, with the dividend distribution set for April 29, 2024. Paul Hastings LLP and Houlihan Lokey, Inc. are serving as legal counsel and financial advisor, respectively.
April 16, 2024 | 1:23 pm
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Barnes & Noble Education implements a stockholder rights plan to deter acquisitions of 10% or more of its stock, with rights exercisable at $5.00, aiming to protect against hostile takeovers.
The adoption of a stockholder rights plan, often referred to as a 'poison pill', is typically viewed positively by existing shareholders as it protects against undervalued takeovers and could potentially lead to a short-term increase in stock price due to perceived protection. However, it may also deter potential investors or acquirers, leading to mixed market reactions. Given the specifics of the plan, including the exercisable rights and the conditions under which they become active, this move is likely to be seen as a strong defensive measure by BNED to safeguard its independence and current stockholder value.
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