Charlotte Russe Holding Corp. said Thursday its board adopted a stockholder rights plan, also known as a poison pill, which companies often use to discourage hostile takeovers. The specialty retailer emphasized that the move was not in response to a specific proposal.
The plan applies to shareholders of record at the close of business on Aug. 25. Those shareholders will receive rights to purchase shares of a new series of preferred stock.
Charlotte Russe said the plan is “designed to enable all stockholders…to realize the full value of their investment and to provide for fair and equal treatment for all stockholders in the event that an unsolicited attempt is made to acquire Charlotte Russe.”
Although poison pills make it harder to attempt a hostile takeover, Charlotte Russe pointed out that the plan is not intended to bar such a move by another company. The purpose, the specialty chain said, is to “deter any attempt to acquire Charlotte Russe in a manner or on terms not approved by Charlotte Russe’s board of directors and, in some cases, the stockholders.”
Under the terms of the plan, the rights will be distributed as a nontaxable dividend, and will expire 10 years from the record date. The rights become exercisable “only if a person or group acquires 15 percent or more” of the retailer’s common stock or announces a tender offer for that much of the company or more.
Should anyone acquire the requisite 15 percent trigger, all rights holders except the buyer become entitled to acquire Charlotte Russe’s common stock at a discount. This puts a greater share of equity in the hands of those not pursuing a purchase of the company, effectively putting the prospective buyer — at least one not working in cooperation with the board — at a disadvantage.
The rights plan may be ended at any time by the board, which can also redeem the rights before the time they are triggered.
Shares of the mall-based fashion chain rose 42 cents, or 3.5 percent, on Thursday to close at $12.51. The close is 26.4 percent higher than the 52-week low of $9.90 on Aug. 4 but 39.3 percent below the high of $20.61 registered on Feb. 25.
Charlotte Russe offers value-priced apparel and accessories targeting young women in their teens and 20s. As of June 28, it operated 469 stores in 45 states and Puerto Rico.
From overseeing America’s fastest-growing speciality retailers to codifying cool, WWD talked to the women who are leading the way for the future of beauty. Check out our Instagram Stories to see how these women built today and are creating tomorrow. (📸: @hannah_khymych) #wwdbeauty
For @laperlalingerie's spring 2018 show, the brand chose to host their event at @thevenetianmacao. With Chinese megastars @bingbing_fan and @hubing in attendance, La Perla debuted a rock ‘n’ roll-inspired collection. The show marked the start of Sands Macao Fashion Week, which runs from October 19 to 24 — the city’s first such event. Pictured here are models backstage with glimmering eyes. #wwdfashion (📷: Cheuk-Yin To)
Trending for spring 2018: top stitch design. Gone are the days of stitch just for seams — designers are using the once-minimal detail to create strong decorative elements. (📷: Paola Testa; Styled by @andrew_shang) #wwdfashion
@tradesy is turning the concept of a showroom upside down with its new space in Santa Monica. Here, the company plans to hold events, art exhibits and a showcase rare fashion pieces like this Louis Vuitton boxing set. Get all the details on Tradesy’s first showroom on WWD.com. #wwdnews
Spotted last night at the @erdem x @hm launch event: Kate Bosworth, Rashida Jones, Kirsten Dunst and Selma Blair. The party, which took place in LA, also marked the opening of their pop-up shop. “I was interested in creating a collection that wasn’t in any way disposable. It was about pieces you’d create and keep forever, things that have a permanence to it,” designer Erdem Moralioglu said. #wwdeye (📷: Katie Jones)
Renee Zellweger in yellow in 2001 and again in 2017. Chosen as one of the 12 @pantone Leading Spring Colors (and dubbed “Meadowlark”), it only makes sense that the bright hue stands the test of time and is making a resurgence this season, seen already on stars like @blakelively and @gigihadid. (📷: Donato Sardello & @rexfeatures) #wwdfashion #tbt
Dior’s 70th anniversary celebration continues with a new exhibition at the Royal Ontario Museum in Toronto. “Christian Dior,” which is scheduled to run through March 18, takes a look at the founders tenure from 1947 to 1057 and feature 40 designs. Pictured here is an evening gown from the Ailée, fall 1948-49 haute couture collection. #wwdfashion (📷: Brian Boyle)