Krispy Kreme Doughnuts Inc. has announced that its board of directors has adopted a shareholder protection rights agreement to replace the company's existing Rights Plan, which will expire Jan. 18.
"The new Rights Plan was adopted to deter abusive takeover tactics, but it was not adopted in response to any specific effort to acquire control of the company," said Jim Morgan, chairman of the board of directors and CEO of the company. "Krispy Kreme believes the new Rights Plan, like the existing Rights Plan, will provide the board of directors with negotiating leverage if a third party offers to acquire the company at a price that would not provide shareholders with the full value of their investment. The issuance of the rights has no dilutive effect, will not affect reported earnings per share and is not taxable to Krispy Kreme or its shareholders."
In connection with the adoption of the new Rights Plan, the company's board of directors declared a dividend of one right on each outstanding share of the company's common stock. The dividend will be paid Jan. 19 to shareholders of record.
A letter to shareholders regarding the Rights Plan and a summary of certain terms of the Rights Agreement will be mailed to shareholders on or about Jan. 19.
In November, Krispy Kreme was the subject of market chatter regarding a potential takeover by Wendy's/Arby's Group.
