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Following what it referred to as, "unusual and substantial activity in the Company's shares," Air Products & Chemicals (NYSE: APD ) has implemented a shareholder rights plan, whereby each Air Products shareholder will receive a dividend of one warrant for each current share of stock owned on Aug. 5, 2013, the company announced today.
The Air Products rights plan is akin to a poison pill, which is structured to make an unsolicited takeover of the company prohibitively expense.
In this case, the warrants received as part of the rights plan are exercisable if "a person or group acquires beneficial ownership of 10 percent (or 20 percent in the case of institutional investors filing on Schedule 13G as described in the Rights Plan)," without approval of the Air Products' board, according to the press release. The same shareholder rights apply in the case of a merger.
Should the unapproved stock ownership percentage threshold be met, the warrants become exercisable, giving each shareholder the right to purchase "common shares having a market value of twice such price," the company said.
The Air Products shareholder rights plan is not in response to a takeover inquiry or proposal to acquire the company, according to Air Products, and will remain in force until July 24, 2014.