Xoma Corp.'s board of directors has unanimously adopted astockholder rights plan, the company announced onWednesday. Under the plan, preferred stock purchase rightswill be distributed as a dividend to all stockholders at the rateof one right for each share of Xoma stock of record held at theclose of business on Nov. 12.
Xoma (NASDAQ:XOMA) said that once exercisable, each rightwill entitle the holder to purchase units of a new series ofXoma's preferred stock (or, in certain circumstances, commonstock of the acquiring person) with a value of $60 for anexercise price of $30. The company said the rights will beexercisable and will detach from the common stock only if aperson or group acquires 20 percent or more of Xoma commonstock, announces a tender or exchange offer that, ifconsummated, will result in a person or group beneficiallyowning 20 percent or more of the common stock; or if theboard of directors declares a person or group owning 10percent or more of the outstanding common stock to be anadverse person.
The company will be entitled to redeem the rights at $0.001per right until the close of business on the tenth day after therights become exercisable. The rights will expire at the close ofbusiness on Dec. 31, 2002.
Xoma of Berkeley, Calif., commented that the rights plan givesthe board more flexibility to maximize long-term stockholdervalue and is a way to protect stockholders from stockaccumulators or hostile acquirers. Xoma added that the plan isnot being adopted "in response to any specific effort to acquirecontrol of the company and the board is not aware of any sucheffort." Xoma director of corporate communications CarolDeGuzman said there have been no material stock ownershipchanges.
Casey McGlynn of the law firm Wilson Sonsini Goodrich &Rosati of Palo Alto, Calif., told BioWorld that shareholder rightsplans are not a trend in the industry but are not uncommon,either. He said that over the past five years a number of publiccompanies in life sciences and electronics have put such plansin place in order to get higher prices for shareholders; theyhave the power to reject unfriendly suitors. He noted that theplans were born out of hostile takeovers involving junk bondsin the 1980s.
Xoma's board also adopted bylaw amendments that eliminatethe ability of stockholders to call special meetings and requirethem to provide advance notice before submitting proposals. -- Brenda Sandburg
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