On July 28, Tribune Publishing’s board launched a “poison pill” strategy to block any potential hostile takeover, the Chicago Tribune reported.
The company put out a press release saying the board has approved the adoption of a limited duration stockholder rights agreement and declared a dividend distribution of one right for each outstanding share of common stock outstanding as of the record date.
The record date for such dividend distribution is August 7, 2020. The rights expire, without any further action being required to be taken by the board, on July 27, 2021. The adoption of the rights agreement is intended to “to protect the interests of the company and its stockholders by reducing the likelihood that any person or group gains control of Tribune Publishing through acquisitions from other stockholders, open market accumulation or other tactics (especially in current volatile markets) without paying an appropriate control premium,” said the release.
The move comes on the heels of Alden Global Capital co-founder Randall Smith being added to the newspaper company’s board in July.
The hedge fund now has three of seven seats on the board. Alden is Tribune Publishing’s largest shareholder, at 32%.
Poynter’s Rick Edmonds has an
analysis in which he says the motive behind the poison pill is not entirely
clear. Meanwhile Tribune Publishing says it will report its financial results
for the second quarter on Aug. 5. The company will host a conference call to
discuss its business and financial results at 5:30 p.m. Eastern time.
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