Terran Orbital adopts ‘poison pill’ defence
March 5, 2024
By Chris Forrester
Satellite builder Terran Orbital has adopted a so-called ‘poison pill’ share reconstruction in its defence of a buy-out by its existing major shareholder Lockheed Martin (L-M).
Officially, it is a limited period stockholder rights plan. The company stated: “An independent committee of the Board will review and evaluate the Lockheed Proposal as part of the Company’s ongoing review of strategic alternatives to determine the course of action that it believes will maximise value for the Company’s stockholders. However, there is no guarantee that a strategic transaction involving Lockheed Martin or any other party will be approved or consummated.”
Nevertheless, the offer (of $1 per share in cash) from L-M drove Terran’s shares upward.
The company, in essence, believes the L-M offer undervalues Terran’s business. Lockheed owns 28.3 percent of Terran’s stock.
“While the Rights Plan is effective immediately, the rights generally would become exercisable only if a person or group (including a group of persons that are acting in concert with each other) acquires beneficial ownership, as defined in the Rights Plan, of 15 percent or more of the Company’s common stock in a transaction not approved by the Board,” adds Terran.
The Plan kicks in on March 15th and would give each shareholder an extra share. The Plan could last for one year.
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