Netflix Inc. (NASDAQ: NFLX) announced today that its board of directors has adopted a stockholder rights plan. According to the press release:
The Rights Plan is intended to protect Netflix and its stockholders from efforts to obtain control of Netflix that the Board of Directors determines are not in the best interests of Netflix and its stockholders, and to enable all stockholders to realize the long-term value of their investment in Netflix. The Rights Plan is not intended to interfere with any merger, tender or exchange offer or other business combination approved by the Board of Directors.
According to the plan, Netflix is issuing one Right for each current share of common stock outstanding at the close of business on November 2, 2012. These Rights will be exercisable only if someone acquires 10% (or 20% in the case of some institutional investors) or more of Netflix’s common stock in a transaction not approved by Netflix’s board.
If so, each Right entitles its holder to purchase a number of shares of Netflix’s common stock having a then-current market value of twice the exercise price.
The full press release is available here.
Shares are down more than 3% just ahead of the opening bell to $74.40. The 52-week range is $52.81 to $133.43.
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