Carl Icahn is moving in on yet another company. He has apparently taken a stake in Hologic, Inc. (NASDAQ:HOLX), a company which makes diagnostic products, medical imaging systems and surgical products. The company revealed in a press release on its website today that it has adopted a shareholder rights plan or so-called “poison pill” to protect against anything Icahn might try to pull.
Carl Icahn revealed his intent to go activist on Hologic, Inc. (NASDAQ:HOLX) on Nov. 11 in a filing with the Securities and Exchange Commission. He and his partners revealed a 12.63% stake in the company, which amounted to more than 34 million shares, including options to purchase more shares. It should be noted that this stake is segmented among multiple funds which are controlled by Icahn. Icahn’s funds and High River Limited Partnership, which is one of the parties named in the filing along with Icahn’s funds, started buying shares early in October, according to that filing.
The filing said that at that time that they bought the shares because they believed that they were undervalued. It also said that Icahn and the rest of the parties on the filing intended to “have conversations” with Hologic management to talk about how they could enhance value for shareholders. It also revealed that they would seek a seat on the company’s board and that they may acquire more shares of the company.
Now a press release from Hologic, Inc. (NASDAQ:HOLX) dated today reveals that the company has adopted a one-year shareholder rights plan. The board approved it unanimously. The company also said it “received notification from an affiliate controlled by Carl C. Icahn” that it intended to acquire a stake.
The company’s rights plan applies to shareholders of record at the end of business on Dec. 2. They receive one right for each common share they own on that date. At first, the rights won’t be exercisable and will trade along with the common shares. If those rights become exercisable, each right allows shareholders to purchase “one ten-thousandth of a share of a new series of participating preferred stock at an exercise price of $107 per right.” The plan expires on Nov. 20, 2014 unless those rights are redeemed or exchanged by Hologic earlier.
More details on Hologic’s plan
The rights are only exercisable if someone acquires 10% or more of Hologic, Inc. (NASDAQ:HOLX)’s common shares or 15% or more in the case of “passive institutional investors.” If that happens, each right entitles its owner to purchase “at the exercise price, a number of shares of Hologic’s common stock having a then-current market value of twice the exercise price.”
In addition, if this plan is triggered, or if the company merges or acquires the company or Hologic sells or transfers over half its consolidated assets or earning power, each right gives its holder the ability to purchase “for the exercise price, a number of shares of common stock of the person engaging in the transaction having a then-current market value of twice the exercise price.”
Shares of Hologic, Inc. (NYSE:HOLX) rose more than 2% in afternoon trading.