Subchapter F of Chapter 25 of the PABCL generally provides for a delay of five years and imposes certain conditions upon a “Business Combination” between an “interested shareholder” and the corporation. The Business Combination provisions of the PABCL apply to Pennsylvania registered corporations, such as the Company. A “business combination” is defined broadly to include a merger, share exchange, sale of assets and various transactions utilizing a corporation’s assets for purchase price amortization or refinancing purposes. For purposes of this provision, an “interested shareholder” is defined generally as the beneficial owner of at least 20% of a corporation’s voting shares (subject to multiple exclusions). The PABCL does not apply to any “business combination” that was approved in advance by the corporation’s board of directors prior to the acquiring party’s becoming an interested shareholder.
In making its recommendation, our Board of Directors considered, among other things, that:
while the Board of Directors can approve a Business Combination in advance and exempt it from the Business Combination provisions of the PABCL, such approval must be obtained before an investor becomes an “interested shareholder”. Investors are not always cognizant of the Business Combination provisions of the PABCL and thus may become subject to its provisions and then be precluded from participating in a Business Combination for a substantial period of time.
**************** I have trouble believing that an OUTSIDER capable of buying Entercom would, unaware of this provision of PaBCL, become an "interested shareholder" before seeking board approval.
I am just about certain that the Fields are "cognizant" of the business combination provisions.
The Fields' buying from those who volunteer to sell to them is fine. I have been buying, too.
IF they intend to COMPEL shareholders like me to sell to them at any price near the current, absurdly cheap share price, though, that's quite different.