I'm no lawyer and I don't see the fuss
1 Share = 1 Right
>Each Right will entitle Stockholders to buy one ten-thousandth of a >share of a newly created series of preferred stock of the Company, >Series A Preferred Stock, at an Exercise Price of $55.00.
> The Series A Preferred Stock is designed such that each one >ten-thousandth of a share is the economic equivalent of one share >of the Company's Common Stock.
I surmise from this, that if i have 10000 shares of PAIR ( not quite there yet <G>), I can buy a famous Preferred Share for 55 bucks and still have the economic equivalent of all 10000 common, including the voting rights to any such merger (but i have to see the proxy first).
That means 100 % dilution to the acquirer, give or take a few percent.
But the other language suggests the suitor negotiate with the mgmt to remove this poison pill within ten days and the shareholders get a .001 dollar per share or $550 for me for my troubles, not upset at all at the takeover price I am sure.
But I cannot see, why anyone would want to just grab PAIR without negotiation, since Hi-Tech Co. implies that most of its value is in its employees and R&D accomplishments. Grab them and they ( the R&D) run and your assets have been depleted. As an example, what happens when the current product (HDSL) has field problems and the very personnel you want to address the issue have left due to the merger? What value is that product then? the same as before or less?
If XXX wants PAIR they will talk. Synergy, excellence and commitment. New Markets, Corporate Independence and Cross- Company product development. And the pill will history. |
