The Santa Cruz Operation (SCO) has issued a shareholder rights plan to protect its stockholders from a hostile takeover bid, prompting speculation that SCO may be an acquisition target.
The company played down the motive behind the move, saying many publicly traded companies take similar steps. But some observers said shareholder rights plans like SCO?s often pre-empt a takeover move or partial sale of the company. The plan means that any company that buys over 50 per cent of SCO must assume the obligations to shareholders that SCO is introducing.
Under the plan, SCO has given shareholders the right to buy one preferred share as a dividend for each share held. The move should make it more expensive for a bidder to buy enough SCO stock to acquire the company.
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