PMC-Sierra, Inc. today announced that its board of directors has adopted a Stockholders' Rights Plan designed to discourage unsolicited takeover bids.
The chip maker has seen its stock slide from $246 last September to $38 at the close of trading Friday, potentially making it a takeover candidate for bargain-hunters.
"The plan is designed to assure stockholders fair value in the event of a future unsolicited business combination or similartransaction involving the company," the company said, adding that it was not adopted in response to any attempt to acquire the company, and that it is not aware of any such efforts.
Under the plan, PMC-Sierra will issue a dividend of one right for each share of common stock of the company held by stockholders of record as of the close of business on May 25, 2001.
Each right will initially entitle stockholders to purchase a fractional share of the company's preferred stock for $325. However, the rights are not immediately exercisable and will become exercisable only upon the occurrence of certain events, the company added.