Following Alden Global Capital taking a 9.5% stake in the company, Pier 1 Imports stated that its board of directors had adopted a shareholder rights protection agreement.
Pier 1 stated that it intends the rights agreement to promote the fair and equal treatment of its shareholders and to discourage unfair or coercive attempts to acquire control of the company. The rights also restrict any person or group from acquiring beneficial ownership of 10% or more of the company’s outstanding common stock.
After taking its stake in the retailer, Alden expressed a desire to become involved in directing the retailer’s business.
Terry London, Pier 1 chairman, said, “The board feels it is important to ensure that all shareholders have the opportunity to realize the long-term value of the iconic Pier 1 Imports brand, and to guard against coercive or unfair tactics to gain control of the company without paying all shareholders an appropriate premium. Equally important, the board remains focused on our search for a new CEO to guide and execute the company’s omnichannel strategy, and is committed to driving increased value for our shareholders.”
The rights protection agreement attaches a dividend of one right to each outstanding share of the company’s common stock, payable to holders of record as of the close of business on October 7. The rights agreement expires on the close of business following Pier 1’s 2017 shareholders meeting, unless earlier redeemed or exchanged, and unless the rights agreement is approved for extension by the shareholders, in which case the it would expire on the date as set, the company noted.