Shares of FXCM Inc. (NYSE:FXCM), are up more than 3% to $2.32 in pre-market trading Friday following the company’s announcement that its board of directors has adopted a Stockholder Rights Plan and declared a dividend distribution of one right on each outstanding share of the Company’s Class A common stock.
The Company’s Board of Directors is committed to acting in the best interests of all of its stockholders. The Rights Plan is intended to enable all of the Company’s stockholders to realize the full value of their investment in the Company. It is also designed to reduce the likelihood that any person or group would gain control of the Company by open market accumulation or other coercive takeover tactics without paying a control premium for all shares. The Rights Plan is not intended to deter offers that are fair and otherwise in the best interests of the Company’s stockholders.
Under the terms of the Rights Plan, rights to purchase one one-thousandth (1/1000) of a share of a new Series A Junior Participating Preferred Stock of the Company (the “Rights”) at a price of $11.20 per one one-thousandth (1/1000) of a share will be issued at the rate of one right for each outstanding share of the Company’s common stock held of record on February 9, 2015. Under the terms of the Rights Plan, the Rights will initially trade together with the Company’s Class A common stock and will not be exercisable. In the absence of further action by the Company’s Board of Directors, the Rights will generally become exercisable and allow the holder to acquire the shares of the Company’s common stock at a discounted price if (a) a person or group acquires beneficial ownership of 10% or more of the Company’s outstanding common stock or (b) any person or group commences a tender or exchange offer, the consummation of which would result in such person or group acquiring beneficial ownership of 10% or more of the Company’s outstanding common stock. Rights held by the person or group triggering the rights will become void and will not be exercisable.
The issuance of Rights is not a taxable event, will not affect the reported financial condition or results of operations (including earnings per share) of the Company and will not change the manner in which the Company’s Class A common stock is currently traded.