Fortress Paper Adopts Shareholder Rights Plan
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Fortress Paper Ltd., Vancouver, B.C., USA, has adopted a shareholder rights plan to ensure, to the extent possible, that all shareholders of the company are treated fairly and equally in connection with any take-over bid or other acquisition of control of the company. The plan also ensures that the company's board of directors is provided with adequate time to evaluate such a take-over bid and, if appropriate, seek alternatives to maximize shareholder value. The plan has not been adopted in response to any specific take-over bid or other proposal to acquire control of Fortress Paper, the company notes, adding that it is not aware of any such pending or contemplated proposals.
One right will be issued and will attach to each common share of Fortress Paper. The rights will automatically attach to the common shares and no further action will be required by shareholders. The rights will become exercisable in the event that any person, together with joint actors, acquires or announces its intention to acquire 20% or more of the company's outstanding shares without complying with the "Permitted Bid" provisions of the Rights Plan or where the application of the Rights Plan is waived in accordance with its terms.
The "Permitted Bid" provisions prevent the dilutive effects of the Rights Plan from operating if a take-over bid is made to all holders of common shares of the company (other than the bidder) by way of a take-over bid circular that remains open for acceptance for a minimum of 60 days and that satisfies certain other conditions. If a take-over bid does not comply with the requirements of the Rights Plan or where the application of the Rights Plan is not waived in accordance with its terms, the rights holders (other than the acquiring person and its joint actors) will be entitled to purchase additional common shares of the company at a significant discount to the market price.
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