Hanger, Austin, Texas, announced that its board of directors authorized the adoption of a stockholder rights plan with an 18-month term, in light of the company’s recent suspension from trading on the New York Stock Exchange.
According to Hanger, the rights plan is intended to protect the interests of the company and its stockholders by reducing the likelihood that any person or group gains control of the company through open market accumulation or other tactics without paying an appropriate control premium, and by providing the board and stockholders with time to make informed decisions. The rights plan is not intended to deter offers that are fair and otherwise in the best interests of the company and its stockholders. Nor was the rights plan adopted in response to any specific takeover bid or other proposal to acquire control of the company.
“This plan is consistent with our commitment to ensuring that all Hanger stockholders realize the long-term value of their investment, particularly during this period when we believe that our stock price may not represent the full value of our company,” said Vinit Asar, president and CEO of Hanger. “Our board and management team are focused on addressing the company’s accounting issues and becoming current in our SEC [U.S. Securities and Exchange Commission] filings. We believe that the 18-month duration of the rights plan is appropriate given our current circumstances. We intend to explore the termination of the rights plan when the company becomes current with its SEC filings and has applied for relisting on a national stock exchange.”
Pursuant to the rights plan, Hanger will issue one preferred share purchase right for each outstanding share of the company’s common stock to stockholders of record on the close of business on March 10. Initially, these rights will not be exercisable and will trade with the shares of the company’s common stock. The rights will generally become exercisable only if a person or group acquires beneficial ownership of 10 percent or more of the outstanding shares of the company’s common stock without first obtaining board approval, or announces a tender or exchange offer that would result in beneficial ownership of 10 percent or more of the company’s outstanding common stock. In such situations, each holder of a right (other than the acquiring entity or group) will generally be entitled to either (i) purchase one-thousandth (1/1,000) of a share of a series of junior preferred stock at a discounted price, which fractional share of preferred stock will have voting and economic rights equivalent to a share of the company’s common stock, or (ii) at the board’s determination, receive one additional share of common stock, or one-thousandth of a share of such series of junior preferred stock, for each right held.
Unless earlier redeemed, terminated, or exchanged pursuant to the terms of the rights plan, the rights will expire at the close of business on August 28, 2017.
If a stockholder or group beneficially owns 10 percent or more of the company’s outstanding common stock at the time of the announcement of the rights plan, then that stockholder’s existing ownership percentage will be grandfathered, although, with certain exceptions, the rights will become exercisable if at any time after the announcement of the rights plan such stockholder increases its ownership of the company’s common stock by 0.001 percent or more.
Details about the rights plan will be contained in a Form 8-K to be filed by Hanger with the SEC.
