CSS Industries, Inc. (NYSE: CSS), a leading consumer products
company serving the craft, gift and seasonal markets, today
announced the adoption of a short-term stockholder rights plan (the
“Rights Plan”), and declared a dividend distribution of one right
(a “Right”) for each outstanding share of common stock. The record
date for such dividend distribution is November 22, 2019. The
Rights Plan will expire, without any further action by CSS’ Board
of Directors, on the earlier of November 11, 2020 or the business
day immediately following CSS’ next annual meeting of stockholders,
absent an extension being approved by CSS’ stockholders.
The adoption of the Rights Plan is intended to protect CSS and
its stockholders from the actions of third parties that CSS’ Board
determines may not be in the best interests of CSS and its
stockholders, to enable all stockholders to realize the full
potential value of their investment in CSS, and to protect the
interests of CSS and its stockholders by reducing the likelihood
that any person or group gains control of CSS through open market
accumulation or other tactics without paying an appropriate control
premium. In addition, the Rights Plan provides the CSS Board with
time to make informed decisions that are in the best long-term
interests of CSS and its stockholders and does not prevent CSS’
Board from considering any offer that it considers to be in the
best interest of CSS’ stockholders.
The Rights Plan is similar to stockholder rights plans adopted
by other publicly-held companies. Under the Rights Plan, the Rights
generally would become exercisable only if a person or group
acquires beneficial ownership of 10% or more (or, solely in the
case of certain current, ordinary course institutional investors as
described in the Rights Plan, 20% or more) of CSS’ common stock in
a transaction not approved by CSS’ Board. In that situation, each
holder of a Right (other than the acquiring person or group, whose
Rights will become void and will not be exercisable) will have the
right to purchase, upon payment of the exercise price and in
accordance with the terms of the Rights Plan, a number of shares of
CSS common stock having a market value of twice such price. In
addition, if CSS is acquired in a merger or other business
combination after an acquiring person acquires 10% or more (or,
solely in the case of certain current, ordinary course
institutional investors as described in the Rights Plan, 20% or
more) of CSS’ common stock, each holder of the Right would
thereafter have the right to purchase, upon payment of the exercise
price and in accordance with the terms of the Rights Plan, a number
of shares of common stock of the acquiring person having a market
value of twice such price. The acquiring person or group would not
be entitled to exercise these Rights. In the Rights Plan, the
definition of “beneficial ownership” includes derivative
securities.
Stockholders who beneficially owned 10% or more of CSS’
outstanding common stock prior to the first public announcement by
CSS of the adoption of the Rights Plan will not trigger any
penalties under the Rights Plan so long as they do not acquire
beneficial ownership of any additional shares of common stock at a
time when they still beneficially own 10% or more (or, solely in
the case of certain current, ordinary course institutional
investors as described in the Rights Plan, 20% or more) of such
common stock, subject to certain exceptions as described in the
Rights Plan.
Further details of the Rights Plan will be contained in a
Current Report on Form 8-K and in a Registration Statement on Form
8-A that CSS will be filing with the Securities and Exchange
Commission (SEC). These filings will be available on the SEC’s web
site at www.sec.gov and at the Investors Relations section of CSS’
corporate website at www.cssindustries.com.
Guggenheim Securities, LLC is acting as financial advisor to
CSS, and Morgan, Lewis and Bockius LLP is serving as CSS’ legal
advisor.
About CSS Industries,
Inc.
CSS is a creative consumer products company, focused on the
craft, gift and seasonal categories. For these design-driven
categories, we engage in the creative development, manufacture,
procurement, distribution and sale of our products with an
omni-channel approach focused primarily on mass market retailers.
Our core products within the craft category include sewing
patterns, ribbons, trims, buttons, needle arts and kids’ crafts.
For the gift category, our core products are designed to celebrate
certain life events or special occasions, with a focus on packaging
items, such as ribbons, bows, bags and wrap, as well as stationery,
baby gift items, and party and entertaining products. For the
seasonal category, we focus on holiday gift packaging items
including ribbons, bows, bags, tags and gift card holders, in
addition to specific holiday-themed decorations and activities,
including Easter egg dyes and Valentine’s Day classroom exchange
cards. In keeping with our corporate mission, all of our products
are designed to help make life memorable.
Forward-looking
Statements
Any statements contained in this report that do not describe
historical facts, including estimates and other statements
regarding matters that are to occur in the future, as well as
statements regarding future operations, are neither promises nor
guarantees and may constitute “forward-looking statements” as that
term is defined in the U.S. Private Securities Litigation Reform
Act of 1995. Such forward-looking statements may include words such
as “may,” “might,” “will,” “should,” “expects,” “plans,”
“anticipates,” “believes,” “estimates,” “predicts,” “potential” or
“continue,” the negative of these terms and other comparable
terminology. Any such forward-looking statements contained herein
are based on current assumptions, estimates and expectations, but
are subject to a number of known and unknown risks and significant
business, economic and competitive uncertainties that may cause
actual results to differ materially from expectations.
Forward-looking statements in this document may include, but are
not limited to, the statements regarding the anticipated benefits
and expected consequences of the Rights Plan that CSS has adopted.
Such forward-looking statements are based upon CSS’ current plans,
estimates and expectations and are not a representation that such
plans, estimates, or expectations will be achieved. Because such
statements include risks, uncertainties and contingencies, actual
events may differ materially from the expectations, intentions,
beliefs, plans or predictions of the future expressed or implied by
such forward-looking statements. These risks, uncertainties and
contingencies include, but are not limited to, the effectiveness of
the Rights Plan in (i) preventing a third party from taking
advantage of the onset of adverse market conditions or recent and
potentially short-term declines in CSS’ share price to acquire
actual or effective control, in the open market or otherwise, of
CSS’ common stock without paying a price that does not reflect CSS’
intrinsic value or long-term prospects, or (ii) providing the CSS
Board with an increased period of time to evaluate the adequacy of
an acquisition offer, investigate alternatives, solicit competitive
proposals, or take other steps necessary to maximize value for the
benefit of all CSS stockholders. Other potential risk factors
include the risks and other risk factors detailed in various
publicly available documents filed by CSS from time to time with
the Securities and Exchange Commission (SEC), which are available
at www.sec.gov, including but not limited to, such information
appearing under the caption “Risk Factors” in CSS’ Annual Report on
Form 10-K filed with the SEC on May 31, 2019. Any forward-looking
statements should be considered in light of those risk factors. CSS
cautions readers not to rely on any such forward-looking
statements, which speak only as of the date they are made. CSS
disclaims any intent or obligation to publicly update or revise any
such forward-looking statements to reflect any change in Company
expectations or future events, conditions or circumstances on which
any such forward-looking statements may be based, or that may
affect the likelihood that actual results may differ from those set
forth in such forward-looking statements.
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WILLIAM G. KIESLING – SENIOR VICE PRESIDENT – GENERAL COUNSEL
610-729-3743 bill.kiesling@cssindustries.com
CSS Industries (NYSE:CSS)
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