Great news today – EyakTek has upped its original offer to $7.50 cash. I am looking for something in the $8.00 – $9.00 range, and given the GTSI board’s continued refusal to negotiate at these levels, I think we’ll see something a bit higher, at which point I’ll move out. GTSI has also instituted a Shareholder Rights Plan (a.k.a. Poison Pill) to give it some breathing room while trying to force a better offer from EyakTek.
The Rights will be exercisable if a person or group, or any other person with whom they are acting in concert, without the approval of the Company’s Board, acquires 20% or more of the Company’s common stock or announces a tender offer for 20% or more of the Company’s common stock. Under the Rights Plan, synthetic ownership of the Company’s common stock in the form of derivative securities counts towards the 20% ownership threshold, if the investor or group actually owns 5% or more of the common stock. The Rights also will be exercisable if a person or group that already owns 20% or more of the Company’s common stock, without Board approval, acquires an additional 1% (other than pursuant to a dividend or distribution paid or made by the Company or pursuant to a stock split or subdivision).
If the Rights become exercisable, all Rights holders (other than the person or group triggering the Rights) will be entitled to purchase Company common stock at a 50% discount. Rights held by the person or group triggering the Rights will become void and will not be exercisable.
Source: GTSI Investor Relations