Toowit,
Your absolutely right.
Such a plan goes into effect once the board of directors approve the latter by way of resolution during a special meeting. The validity of such a plan is conditional upon ratification by the company's shareholders at an ensuing general and/or special meeting. If the plan is approved, it is considered to be effective as of the date of adoption of said resolution.
From a professional point of view I find the latest release quite intriguing.
First of all, one must consider the reasoning behind the extension of the minimum period from 21 to 45 days
Requiring a takeover bid to remain open for 45 days addresses Global Thermoelectric's concern that existing securities legislation does not allow sufficient time for shareholders and management to properly consider and explore alternatives to a takeover bid, nor does it ensure that all shareholders have an equal opportunity to benefit from any bid.
Hmmm, alternatives to a takeover bid? Not very many alternatives if you ask me! Maybe a white knight.....
At this point, this is speculation so we will just have to wait to see what the future holds for us, the shareholders.
The rights plan defines a permitted bid as a takeover bid for all Global Thermoelectric shares that remains open for acceptance for a minimum of 45 days (with some exceptions) during which time no tendered shares may be acquired by the bidder. If more than 50 per cent of Global Thermoelectric shares are tendered, shareholders who have not tendered to the bid will have an additional 10 trading days to deposit their shares under the bid.
Wording is everything!
Under the rights plan, one right is issued at no cost and attaches to each share. The rights are not exercisable until separation time, whereupon the rights will separate from the shares and trade independently.
One can compare this with Units. The trading shares can be considered as conditional Units, the condition being the encountering of one of the following conditions:
Separation time occurs on the eighth trading day from the earlier of i) the acquisition by a party, other than pursuant to a permitted bid, of 20 per cent or more of outstanding and issued Global Thermoelectric shares and ii) the date of announcement of intent to make a takeover bid other than a permitted bid. After the separation time, each right entitles the holder, on payment of a defined exercise price, to purchase Global Thermoelectric shares with a market value equal to twice that exercise price.
Chief , I would like you comments on this excerpt. Both situations seem to exclude a permitted bid. Since a permitted bid seems to be defined as being a takeover bid for all Global Thermoelectric shares that remain open for acceptance for a minimum of 45 days, am I correct in assuming that the above situations concern circumstances in which the bid remains open for less than 45 days? Does it any way have an impact on a hostile takeover (forcing the acquiring company to at least have some discussions the the BoD)?
Kind Regards
AK |
