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Investing.com -- Jack in the Box (NASDAQ:JACK) stock rose 8% after the fast-food chain announced it had adopted a limited-duration stockholder rights plan, commonly known as a "poison pill."
The company implemented the rights plan in response to Biglari Capital Corp.’s accumulation of its stock. According to Jack in the Box, Biglari privately informed the company that it now owns 9.9% of the company’s common shares and intends to increase its stake further.
The rights plan is designed to prevent any single entity from gaining control of the company without paying an appropriate premium. It will generally become exercisable only if a person or group acquires beneficial ownership of 12.5% or more of the company’s outstanding shares.
"Jack in the Box’s Board is committed to protecting our stockholders and remains confident in management’s ability to execute the Company’s ’JACK on Track’ plan to improve long-term financial performance across its restaurant system, strengthen its balance sheet and transition to an asset-light business model," said David L. Goebel, Independent (LON:IOG) Chairman of the Board.
Under the terms of the plan, Jack in the Box will issue one right for each outstanding share of common stock. If triggered, all rights holders except the triggering entity would be entitled to acquire company shares at a 50% discount to the then-current market price, or the company could exchange each right for one share of common stock.
The company noted that the rights plan applies equally to all current and future stockholders and is not intended to deter fair offers that are in stockholders’ best interests.
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