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Six Flags, Inc. announced today that its Board of Directors approved the adoption of a shareholder rights plan (the "Rights Plan") under which one right will be distributed as a dividend on each share of common stock held of record as of the close of business on December 17, 2008 (the "Rights"). The distribution of the Rights is not taxable to shareholders.
Each Right, if and when it becomes exercisable, entitles the holder to buy one one-thousandth of a share of Series A Junior Preferred Stock for $1.25 (subject to adjustment). If any person or group becomes the beneficial owner of 15% or more of Six Flags' common stock at any time after the date of the Rights Plan (with certain limited exceptions), then each Right not owned by such person or group will entitle its holder to purchase, at the Right's then-current exercise price, shares of common stock of the Company or, in certain circumstances, the acquiring person, having a market value of twice the Right's then-current exercise price. The Rights Plan, which is similar to the rights plans of many other public companies, will expire on December 2, 2018, unless the rights are earlier redeemed or the Rights Plan is terminated earlier by Six Flags.
Read the press release from PR Newswire via Marketwatch.
Rick Munarriz from The Motley Fool notes:
This is NOT what Shapiro was talking about during the conference call about a significant decision coming soon. This is actually flashy language for what is essentially a poison pill -- a way for SIX to thwart a hostile takeover (since the rights would make it more costly for a buyer to snag a majority of the votes).