The Window Closing Pill – One Response to Stealth Stock Acquisitions

The Window Closing Pill – One Response to Stealth Stock Acquisitions


By: Peter Golden

In light of the ability of activist investors and raiders to acquire economic interests in companies substantially in excess of the five percent Schedule 13D reporting threshold prior to any mandated public disclosure, we recommend that public companies consider a new form of rights plan.  The plan seeks to deter acquisitions of shares and derivatives by an acquirer passing  five percent ownership until ten days after an acquirer has filed a Schedule 13D with the SEC, regardless of whether the filing is required under SEC rules. After disclosure has been made and the ten day waiting period has expired, the plan would not restrict additional stock and derivative acquisitions by the acquirer.

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