EnWave Corporation (CVE:ENW) has adopted a shareholder rights plan, the company told investors on Wednesday.
The Vancouver-based company said the plan was adopted to make sure that all shareholders of the dehydration technology firm are treated “fairly and equally” in the event of a takeover bid or acquisition.
It clarified that EnWave was not aware of any specific takeover bid or proposal in action at the moment.
One right will be issued and attached to each outstanding share of EnWave by close of business Wednesday and will automatically attach to the shares held by investors. Going forward, rights will be attached to any shares issued.
The rights will become exercisable if any person or group moves to acquire 20% or more of the company’s shares without complying with the provisions of the rights plan.
The permitted bid provisions prevent any dilutive effects of the rights plan from operating if a takeover bid is made to shareholders other than the bidder by way of a takeover bid circular that remains open for acceptance for at least 105 days.
If the proposed takeover does not comply with the requirements, rights holders are entitled to purchase additional shares of EnWave at a price significantly less than the open market price.
EnWave said it plans to recommend the ratification of the rights plan to shareholders at its next annual general meeting in 2020. If ratified, the plan will have an initial term of three years.
The firm’s dehydration technology, the Radiant Energy Vacuum, is a proprietary method for drying organic materials. The company has signed over 30 royalty-bearing licenses to date.
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