Hill International said its board unanimously rejected the unsolicited takeover proposal from DC Capital Partners (DCCP) to acquire Hill at a purchase price of $5.50 per share in cash on a fully-diluted basis.
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After thoroughly considering DCCP's proposal, the board determined that the proposal substantially undervalues Hill's common stock given the company's current strategic plans and prospects for continued growth and stockholder value creation, among other considerations, and therefore that acceptance of the proposal is not in the best interests of the company or its stockholders.
Separately, the board unanimously approved the adoption of a stockholder rights plan that is intended to ensure that all stockholders have the opportunity to realize the long-term value of their investment in the company and are protected from coercive and opportunistic takeover attempts.
The plan is also intended to ensure that decisions on corporate strategy and control are made by the board focused on the best interests of the company and its stockholders over the long-term without undue pressure from coercive short-term tactics.
The decision to adopt the rights plan aims to provide the board with adequate time to fully assess its options, execute on the company's strategic plan and promote stockholder value.
Under the rights plan, stockholders of record as of May 18, 2015 will receive one preferred share purchase right for each share of Hill common stock held. Initially these rights will not be exercisable and will trade with the shares of the company's common stock.
With certain exceptions, the rights become exercisable if any person or group acquires beneficial ownership of 15% or more of Hill's common stock.
In that situation, each holder of a right (other than such person or members of such group, whose rights will become void and will not be exercisable) will be entitled to purchase a number of shares of Hill's common stock that have a market value of twice the exercise price of the right. Stockholders will not be required to take any action to receive the rights distribution.
Until the rights become exercisable, they will trade with the shares of the company's common stock. The rights plan will not have any impact on the reported earnings per share of the company and will not change the manner in which the company's common stock is currently traded.
Additional details about the rights plan will be included in a Form 8-K to be filed with the U.S. Securities and Exchange Commission. ■