March Networks entered into a shareholder rights plan agreement (the “Rights Plan”) to encourage the fair treatment of shareholders in any takeover offer for the company. The Rights Plan is effective immediately and will provide the board of directors of March Networks and the shareholders more time to consider fully any unsolicited takeover bid for the corporation. It will also allow more time for the board of directors to pursue other alternatives to maximize shareholder value, if appropriate. Shareholders will be asked to confirm the rights plan at the next annual and special meeting of the shareholders scheduled to be held on August 26.
One right has been issued with respect to each of the common shares of the corporation issued and outstanding as of July 23. These rights will become exercisable only when a person, including any party related to it, acquires or attempts to acquire 20 percent or more of the outstanding shares without complying with the “Permitted Bid” provisions of the Rights Plan or without approval of the board of directors of March Networks. Should such an acquisition occur or be announced, each right would, upon exercise, entitle a rights holder, other than the acquiring person and related persons, to purchase shares at a 50-percent discount to the market price at the time.
Under the Rights Plan, a permitted bid is a bid made to all holders of the Shares and which is open for acceptance for not less than 60 days. If at the end of 60 days at least 50 percent of the outstanding shares, other than those owned by the offeror and certain related parties have been tendered, the offeror may take up and pay for the Shares but must extend the bid for a further 10 days to allow other shareholders to tender.
The rights plan has not been adopted in response to any specific proposal to acquire control of the corporation, nor is the corporation aware of any such intention. The rights plan has a term of nine years, and its adoption is conditional on regulatory approval and shareholder ratification at the next annual and special meeting of shareholders. The rights plan is also subject to reconfirmation by the shareholders of the corporation every three years.
The rights plan is similar to other shareholder rights plans recently adopted by several other Canadian companies. A material change report and a complete copy of the rights plan are being filed on SEDAR.