BEDMINSTER, N.J. (AP) -- Gain Capital Holdings Inc. said Wednesday that it has adopted a stockholder rights plan following a $210.4 million takeover offer from another currency exchange provider FXCM.
The shareholder rights plan — often called a "poison pill" — is intended to reduce the risk of a potential takeover tactic that involves a company buying up shares to acquire control. Gain said that the plan allows the board to consider the proposal and alternatives to maximize stockholder value.
Gain, an investment brokerage, said that under the plan, shareholders as of April 22 will get one right for each share of common stock they hold in the company, distributed as a dividend.
Each right will entitle stockholders to buy a fraction of new preferred stock. They can exercise this right only if someone acquires ownership of 15 percent or more of the company's common stock, or commences a tender or exchange offer that would result in a person or group owning 15 percent or more of the company's common stock.
The rights would expire in 2016.
Gain, based in Bedminster, N.J., made the move after FXCM made a bid Tuesday for the company.
FXCM said it would give Gain shareholders 0.3996 shares of FXCM stock for each share of Gain common stock. This equates to an offer price of $5.35 per share of Gain common stock, a 25 percent premium to Gain's closing share price on Monday, before news of the offer was public.
New York-based FXCM said it is also prepared to offer up to $50 million in cash in lieu of FXCM shares.
Citi analyst William Katz said that he thinks that a higher purchase price may be deserved. The company's shareholder rights plan appears to further that notion and potentially reduces the probability that a deal will be reached.
The analyst said he expects negotiations will continue but suspect's Gain's announcement is evidence that FXCM's decision to take the offer to the board follows unsuccessful direct negotiations with top management.
Gain's shares added 8 cents to $5.35 in midday trading, in line with broader market trends Wednesday, after jumping 23 percent Tuesday following the offer being made public. FXCM shares increased 17 cents to $13.79.
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