Xyratex Ltd (XRTX) announced Monday that its Board has adopted a shareholder rights plan, pursuant to which the Board of Directors declared a dividend distribution of one preferred share purchase right on each outstanding common share of the Company.
Subject to limited exceptions, the preferred share purchase rights will be exercisable if a person or group acquires 15% or more of the Company's common shares or announces a tender offer for 15% or more of the common shares.
Under certain circumstances, each right will entitle shareholders to buy one one-hundredth of a share of the newly created series A junior participating preference shares of the Company at an exercise price of $50.00. The Board of Directors will be entitled to redeem the rights at $0.0001 per right at any time prior to the occurrence of a triggering event.
The company said that the rights are intended to enable all of its shareholders to realize the long-term value of their investment in the Company. They do not prevent a takeover, but should encourage anyone seeking to acquire the Company to negotiate with the Board of Directors prior to attempting a takeover. The rights will expire on December 17, 2013.
In addition, Xyratex announced that its board of directors has declared a one-time, special cash dividend of $2.00 per share. The special cash dividend will be distributed on December 31, 2012 to shareholders of record as at the close of business on December 27, 2012.
Xyratex's board of directors has also declared a quarterly cash dividend of $0.075 per common share and approved the acceleration of the dividend payable date to December 31, 2012 to shareholders of record at the close of business on December 27, 2012. The quarterly dividend would otherwise have been declared in January 2013 with Xyratex's quarterly earnings results for the fourth quarter of fiscal 2012.
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