Leigh; RE > Shareholders will receive preferred stock purchase rights as a dividend at the rate of one Right for each share of Common Stock held as of the close of business on February 9, 1998. These Rights are scheduled to expire on February 2, 2008.
Each Right will entitle the shareholder, under alternative circumstances, to buy either securities of Service Merchandise or securities of an acquiring company (depending on
the form of the transaction) at an exercise price that will be half of the market value of such securities at the time. <<<
I'm not sure that was a good idea, it may protect insiders and
older share holders, but protections can back fire.
Why would I now want to buy any SME , knowing that I can not really
gain much if a buy out were to come, as the old holders can now buy
stock at a price 1/2 of what I have to pay.
I was considering buying some SME until I saw this, as far as I'm
concerned they can sit on the stock as long as they want.
They made this mistake once before, and you can see where it got
them, new blood don't want to be up against such restrictive
barriers , and any one who would even think of buying her business
would be very much discouraged.
If they put it there to discourage
a take over, they didn't do it for the benefit of the share holders,
but did it to protect their jobs.
With their load of DEBT , buying this dog is worse than picking up a
cigar butt off the street.
It's a shame as they do have what I think is a good long range plan,
but it don't include attracting new share holders.
Jim
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