On August 28, 2017, Finish Line Inc. (NASDAQ: FINL) announced that its Board of Directors voted unanimously to approve a new shareholder rights plan. The plan is designed to protect the best interest of the company’s shareholders. The plan will attempt to reduce the possibility that a person or group will be able to gain control over the company through open market accumulation or coercive takeover tactics.

On August 25, 2017, the Board of Directors declared a dividend of one preferred stock purchase right for each outstanding share of common stock. The dividend will be paid to shareholders of record on September the 11th. Registered holders will be given the right to purchase one ten-thousandth of a share of a new series of Finish Line’s preferred stock. The price will be $26 per right.

The rights will only become exercisable should a person or group acquire 12.5% or more of the company’s outstanding common stock. Each right will allow the holder to buy a number of common stock shares having a market value at the time of twice the Right’s exercise price.

Rights held by the individual holding the 12.5% or more will be voided. Persons or groups holding 12.5% or more of the company’s common stock before the Rights Plan will not cause the Rights to become exercisable. The Rights Plan is set to expire on August 28, 2020. Additional details can be found here.

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