Allergan adopts stockholder rights plan

USA-based Allergan (NYSEL AGN), the subject of a hostile takeover bid from Canada’s Valeant Pharmaceuticals (TSX: VRX) reported yesterday, says its board of directors has unanimously adopted a one-year stockholder rights plan effective April 22, and declared a dividend distribution of one preferred share purchase right on each outstanding share of the company’s common stock.

The Plan is not intended to prevent an acquisition of the company on terms that the board considers favorable to, and in the best interests of, all stockholders. Rather, the Plan aims to provide the board with adequate time to fully assess any proposal.

Under the Plan, stockholders of record at the close of business on May 8, 2014 will receive one right for each share of Allergan common stock held on that date. The distribution of the rights is not taxable to stockholders, and the Plan is scheduled to expire on April 22, 2015.