United Insurance Holdings Corp. (UIHC.OB) announced that its Board has adopted a shareholder rights agreement. In connection with the adoption of the rights agreement, the Board declared a dividend of one preferred share purchase right on each outstanding share of the Company's common stock. The issuance of the rights under the rights agreement will be made to shareholders of record as of the close of business on August 3, 2012.
The company noted that Each right will initially entitle shareholders to buy one one-hundredth of one share of a newly authorized series of junior participating preferred stock at an initial exercise price of $27.00 per one one-hundredth of a share, subject to adjustment.
In general, if any person or group becomes an "acquiring person," all holders of rights other than the "acquiring person" may, for $27.00, purchase shares of United's common stock with a market value of $54.00, based on the market price of the common stock prior to such acquisition.
In addition, if United is acquired in a merger or similar transaction after the rights become exercisable, all holders of rights other than the "acquiring person" may, for $27.00, purchase shares of the acquiring corporation with a market value of $54.00 based on the market price of the acquiring corporation's stock prior to such merger or similar transaction.
The company noted that its board may redeem the rights for $0.001 per right at any time prior to the time when the rights become exercisable. Unless the rights are redeemed, exchanged or terminated earlier, they will expire on July 20, 2022.
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by RTT Staff Writer
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