Citizen Media Watch

december 9th, 2020

Fluor Corporation Adopts Limited Duration Stockholder Rights Agreement

Posted by lotta

The toxic pill is sometimes more widely used to describe other types of adoption defense that involve the purpose of certain measures. Although the broad category of defence against acquisitions (better known as the ”shark advocate”) includes the traditional shareholder rights plan poison pill. Among other measures to protect against retaliation: a shareholder law plan, commonly referred to as a ”poison pill,” is a kind of defensive tactic that a group`s board uses against an acquisition. Retail holding company Tailored Brands Inc., mattress and bed linen manufacturer Tempur Sealy International Inc. and engineering and construction company Fluor Corp. recently announced their introduction of poison pills. Tailored Brands, based in Houston, which includes wearhouse and joS manufacturers. A. Bank, said in a Form 8-K filed on March 31 with the Securities and Exchange Commission that its board of directors had adopted a short-term shareholder rights plan to protect investors. The company explained that the COVID-19 pandemic had influenced market activity and increased volatility in Tailored Brands` share trading. Dividend distribution will take place on April 10, 2020, which will be paid to shareholders on that date and is not taxable to shareholders.

The rights expire on December 31, 2020, unless the rights are exchanged or exchanged earlier. The measure is intended to ”protect shareholders from abusive tactics to take control of the company,” Fluor said, adding that the rights should not prevent the acquisition, but rather encourage anyone wishing to acquire the company to negotiate first with the board of directors. In listed companies, ”poison pills” refer to different methods to discourage takeover bids. Takeover bids are attempts by a bidder to gain control of a target company, either by requiring voting representatives to be elected to the board of directors, or by acquiring a control block and using the associated votes to be elected to the board of directors. Once the bidder has control of the board of directors, it can manage the objective. As explained below, targets have several resistances to opaques and different types of defence have been called ”poison pills” because they harm not only the bidder, but also the objective (or its shareholders). Currently, the most common type of defence of acquisitions is a shareholder law plan. Since the company`s board of directors is able to exchange or eliminate a standard poison pill, it does not generally exclude a proxy fight or any other acquisition attempt that is not accompanied by the acquisition of a significant block of shares of the company.

However, it may prevent shareholders from entering into certain agreements that can help in the event of a proxy fight, such as. B an agreement to pay another shareholder`s fees. However, in combination with a staggered board of directors, a shareholder law plan can be a defence. [8] Rights are exercised only if a person or group acquires 10% or more of the company`s current common shares.

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