Casual Male Creates Takeover Protection Plan
Canton, Mass. With retail stock prices near record lows, it’s likely that more companies will follow in the wake of Casual Male Retail Group whose board of directors has adopted a rights plan.
The plan, which was announced Tuesday, will come into play if a potential buyer “becomes, or launches a tender offer to become the beneficial owner of 15% or more of the company's outstanding common stock (including derivative positions), subject to certain exceptions,” the company said in a statement.
By instituting the plan, the board is protecting the company from the potential of a hostile takeover by a third-party company “that has not had discussions with Casual Male’s board of directors,” the retailer’s VP, Jeff Unger, told Boston.com, the online division of the Boston Globe. "It was instituted to protect shareholders' interests so they would receive fair-market value for their ownership."
The plan will be in effect for one year, expiring on Dec. 9, 2009, according to the company.