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Facing a possible hostile takeover by Microsemi, Zarlink tries to bar anyone from holding more than a 20% voting share in the company
July 26, 2011
OTTAWA -- Zarlink Semiconductor Inc. (TSX:ZL) today announced that, consistent with the strategic alternatives review process announced by Zarlink to enhance shareholder value, its Board of Directors has adopted a limited duration shareholder rights plan (the "Rights Plan") pursuant to a shareholder rights plan agreement entered into by Zarlink and Computershare Investor Services Inc., as rights agent. The Rights Plan is intended to allow the Board of Directors to effectively enhance shareholder value and to ensure that all shareholders are treated fairly and equally in connection with any take-over bid for Zarlink.
The Rights Plan also prevents any person from acquiring beneficial ownership of the right to vote more than 20% of Zarlink's outstanding voting shares or from entering into arrangements that have a similar effect.
In connection with the adoption of the Rights Plan, the Board of Directors authorized the issuance of one share purchase right in respect of each Zarlink common share outstanding as of the close of business on July 25, 2011 (and each voting share issued thereafter, subject to the limitations set out in the Rights Plan). Under the terms of the Rights Plan, the rights will become exercisable if, amongst other things, a person, together with its affiliates, associates and joint actors, acquires or announces an intention to commence a take-over bid to acquire Zarlink shares which, when aggregated with its current holdings, total 20% or more of Zarlink's outstanding voting shares, subject to the discretion of the Board of Directors to defer the time at which the rights become exercisable and to waive the application of the Rights Plan.
Following the acquisition of 20% or more of the outstanding Zarlink voting shares by any person (and its affiliates, associates and joint actors), each right held by a person other than the acquiring person (and its affiliates, associates and joint actors) would, upon exercise, entitle the holder to purchase Zarlink common shares at a substantial discount to their then prevailing market price.
Zarlink Semiconductor Inc. (NYSE/Toronto: ZL)
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