TSXV:AZC.P - Post by User
Comment by
deismanon Oct 01, 2013 2:17pm
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Post# 21781962
RE:RE:Shareholder Rights Plan
RE:RE:Shareholder Rights Plan
I emailed also and this is the reply I received:
Essentially what a high exercise price does is provides the shareholder incentive to hold onto the stock and not to tender to the hostile bidder with the objective that the bidder would then negotiate directly with the Board. Further, with the occurrence of the “flip in” event, the shareholder has the option to purchase more shares at a discounted price thereby diluting down the Acquiring person.
The exercise price is generally based on the long term trading value of the company and a multiple depending on market conditions.
The Board also cab redeem the Rights at price of $0.00001 per right which also achieves the objective of forcing the potential hostile bidder to negotiate w/ the Board.
Hope this helps
Letitia