National Education Corp. Adopts Poison Pill Plan
National Education Corp. said it adopted a poison pill plan to ward off potential hostile takeovers.
No takeover attempts have been advanced and none is anticipated, the Irvine-based vocational training company said.
“It’s just a precaution,” said H. David Bright, president and chief executive.
Terms of the rights offering plan call for issuance of one right to buy a share of newly issued preferred stock for each outstanding common share. The company has about 10 million common shares outstanding but no preferred stock.
The rights are exercisable if an acquiring group accumulates a 20% or greater stake in National Education or announces plans to acquire 30% or more of the company’s shares outstanding.
Under certain other conditions, rights holders may also be allowed to purchase National’s common stock, or the common stock of an acquiring company, at half of its market value. Shareholder rights plans are commonly referred to as poison pills because they can serve to make a hostile takeover of the company extremely expensive for a raiding company. Such plans and other anti-takeover measures have been adopted by a number of companies in recent years.
Terms of the plan also allow National Education to redeem the rights for 5 cents each.
The rights will be distributed to shareholders of record on Nov. 14 and will expire Nov. 13, 1996.
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