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Internet Capital Group, Inc. (Nasdaq: ICGE) gained 2 3/32 to 8 5/32 Friday after directors adopted a shareholder rights plan designed to discourage hostile takeover attempts.
The Wayne, Pennsylvania-based holding company for Internet businesses said shareholders will receive a dividend of one right for each common share held as of the close of business December 6th. Each right entitles the holder to buy one ten-thousandth of a share of junior preferred stock for US$100 in the event someone acquires -- or announces the intent to acquire -- 15 percent or more of the company's common stock.
If Internet Capital is sold or acquired, or if 50 percent or more of its assets or earning power is sold, shareholders will be able to purchase shares of the acquiring company.
The rights plan is "designed to provide the board of directors sufficient time to evaluate proposed change-in-control transactions by encouraging potential acquirers to negotiate" before beginning a tender offer, Internet Capital said.
According to the company, the plan is not intended to prevent transactions on terms that are fair to the shareholders nor deter a potential acquirer willing to complete a transaction on such terms.
Internet Capital has interests in more than 70 companies that provide business-to-business (B2B) e-commerce services. Company shares have fallen since the start of the year, and are down from a high of 212 set last December.
Earlier this month, the company said it would lay off 35 percent of its workforce, taking a $25 million to $30 million charge to fourth-quarter earnings. The company also reported a third-quarter loss that was wider than a year earlier, as its partner companies suffered from a weak environment for their services and their stocks.
President and chief executive officer Walter Buckley
said the company intends to focus its capital resources
on the 15 partner companies it believes have potential to
return near-term value for shareholders.
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