Shareholder Rights Plan

A shareholder rights plan is a provision embraced by a company wishing to battle off unwanted takeover admirers. The trigger is the amount of outside ownership that triggers the rights plan; 15% is common. Rights plans can take different forms, yet the essential thought is to make it simpler for current shareholders to block an outside takeover endeavor. For instance, a rights plan could permit current shareholders to buy the company's shares at a discount in the event that the trigger is stumbled, in this way making it simpler for current holders to buy a larger number of shares than the undesirable admirer.