Synacor Adopts Stockholder Rights Plan
15 July 2014 - 9:45PM
Synacor Inc. (Nasdaq:SYNC) today announced its Board of Directors
adopted a Stockholder Rights Plan and declared a dividend
distribution of one preferred share purchase right on each
outstanding share of the Company's common stock. The Rights Plan,
which was adopted by the Board following the evaluation and
consultation with the Company's outside advisors, is in response to
the recent accumulation of Synacor's outstanding common stock and
related activity. The Rights Plan is intended to protect Synacor
and its shareholders from efforts to obtain control that are
inconsistent with the best interests of the Company and its
shareholders. The Rights Plan provides several recognized
shareholder protections by guarding against coercive tactics to
gain control of the Company without an adequate change of control
premium and facilitating the realization of the full long-term
value of all of the shareholders' investments in the Company.
Consistent with best practices of corporate governance, the Company
intends to put the Rights Plan before its shareholders for approval
at its next annual meeting. The Rights Plan expires automatically
in 12 months unless previously approved by shareholders (in which
case it will expire in three years).
Synacor Chairman Jordan Levy said, "The Rights Plan is designed
to protect the interests of all our shareholders. While we are
always willing to engage in constructive dialogue with our
investors and regularly consider all methods to maximize long-term
shareholder value, we have concerns regarding the motivations and
actions of JEC Capital Partners. JEC is affiliated with Peter
Heiland, who is both a Managing Director of JEC and the Interim CEO
of a company with similar customers to Synacor and the capability
to become a potential acquirer, and as such may have motives
that are not aligned with other shareholders. In order to guard
against potential attempts to seize control of the Company without
paying an appropriate premium, we are taking this action today."
The rights will be exercisable only if a person or group acquires
10% or more of Synacor's common stock. If a shareholder's
beneficial ownership of Synacor common stock as of the time of this
announcement of the Rights Plan and associated dividend declaration
is at or above the threshold (including through entry into certain
derivative positions), that shareholder's existing ownership
percentage would be grandfathered, but the rights would become
exercisable if at any time after such announcement the shareholder
increases its ownership percentage by 0.001% or more. Each right
will entitle shareholders to buy one one-hundredth of a share of a
new Series A Junior Participating Preferred Stock of the Company at
an exercise price of $10, subject to adjustment for certain
corporate events. The rights will not prevent a takeover (or sale
of the Company), but should encourage anyone seeking to acquire the
Company to negotiate with the Board. If a person or group
acquires 10% or more of Synacor's outstanding common stock, each
right will entitle its holder (other than such person or members of
such group) to purchase for the Right's then-current exercise price
a number of Synacor common shares having a market value of twice
such price. In addition, if Synacor is acquired in a merger or
other business combination transaction after a person has acquired
in excess of the applicable percentage thresholds the Company's
outstanding common stock, each Right will entitle its holder to
purchase, at the Right's then-current exercise price, a number of
the acquiring company's common shares having a market value of
twice such price. In addition, at any time after a person or group
acquires 10% or more of Synacor's outstanding common stock,
Synacor's Board of Directors may exchange one share of Synacor's
common stock for each outstanding right (other than rights owned by
such person or group, which would have become void). The acquiring
persons will not be entitled to exercise the rights. Prior to the
acquisition by a person or group of beneficial ownership of 10% of
the Company's common stock, the rights are redeemable for $0.01 per
right at the option of the Board of Directors. Certain synthetic
interests in securities created by derivative positions—whether or
not such interests are considered to constitute beneficial
ownership of the underlying common stock for reporting purposes
under Regulation 13D of the Securities Exchange Act—are treated as
beneficial ownership of (i) the notional or other number of shares
of the company's common stock to be acquired upon exercise or
settlement of such instrument or as the basis upon which the value
or settlement amount of such instrument is to be calculated, or
(ii) if no such number of shares is specified in the relevant
documentation of such instrument, that number of shares of the
company's common stock determined by the Board in its sole
discretion to be the number of such shares to which such instrument
relates. The dividend distribution will be made on July 14, 2014,
payable to shareholders of record on that date, and is not taxable
to shareholders. The rights will expire in one year on July 14,
2015, unless ratified by the shareholders of the Company by such
date, in which case the rights will instead expire on July 14,
2017. The Rights Plan and a summary of its terms will be filed with
the Securities and Exchange Commission.
About Synacor
Synacor's white-label platform enables cable, satellite, telecom
and consumer electronics companies to deliver TV Everywhere,
digital entertainment, cloud-based services and apps to their
end-consumers across multiple devices, strengthening those
relationships while monetizing the engagement. In addition, Synacor
offers digital ad inventory for brands wanting a customized,
targeted, programmatic means of reaching their audiences. Synacor
(Nasdaq:SYNC) is headquartered in Buffalo, NY, with tech hubs in
Toronto, Ottawa and Boston, and ad sales offices in New York,
Detroit and Los Angeles. For more information, visit synacor.com.
All Media. One Place. Any Device.
The Synacor logo is available at
http://www.globenewswire.com/newsroom/prs/?pkgid=11609
Forward-Looking Statements
This release includes certain forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of
1995. These statements are based on the current expectations or
beliefs of management of Synacor, and are subject to uncertainty
and changes in circumstances. Actual results may vary materially
from those expressed or implied by the statements herein due to
changes in economic, business, competitive, technological and/or
regulatory factors, and other factors affecting the operation of
the respective businesses of Synacor. More detailed information
about these factors may be found in filings by Synacor, as
applicable, with the Securities and Exchange Commission, including
their respective Quarterly Report on Form 10-Q. Synacor is under no
obligation to, and expressly disclaims any such obligation to,
update or alter their respective forward-looking statements,
whether as a result of new information, future events, or
otherwise.
CONTACT: Investor Contact:
Denise Garcia, MD
ICR
ir@synacor.com
716-362-3309
Press Contact:
Meredith Roth, VP, Corporate Communications
Synacor
mroth@synacor.com
646-380-5141
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