Energizer adopts stock price control measures ahead of spin-off

By Simon Pitman contact

- Last updated on GMT

Energizer adopts stock price control measures ahead of spin-off
Ahead of the spin-off of its personal care business, Energizer Holdings has adopted a Limited Duration Shareholder Rights Plan, designed to control the company’s stock.

In conjunction with the plan, the company has declared a dividend distribution of one preferred share purchase right on each preferred share of the company’s common stock.

The measure will expire on December 31, 2015, approximately six months ahead of the completion of the spin-off, which is due to be completed by the end of June, 2015.

The poison pill

In the financial world the measure is known as a ‘poison pill’ stock plan, and is invariably drawn up in an effort to devalue the company’s stock by flooding the market with additional shares with the intention of making it too expensive for an outside investor to acquire a controlling stake.

“The plan is designed to assist the Board in the period leading up to and immediately following the separation by protecting against creeping accumulations or other share acquisition activity that the Board believes would not be in the best interest of shareholders,”​ the company press statement read.

The plan will be triggered by any investor acquiring 10% or more of Energizer’s outstanding common stock after May 21, 2015, which then means that the purchase of any additional shares of common stock would have a value of twice the exercise price.

The plan also outlines penalties if Energizer is acquired in a merger or other business transaction and any individual holds more than a 10% share in the common stock.

Edgewell personal care

Back in February Energizer executives confirmed that the newly spun-off personal care companywill be called Edgewell Personal Care upon its separation, which will make it an entirely independent business from the Household Product Division, which will retain the Energizer Holdings name and logo.

According to the company, the separation activities are well under way and on track for the deadline, July 1st​, but the two businesses will continue to operate as normal throughout the procedure.

Last month the company also named the executive line up for the new personal care division.

The new positions include Ward Klein as executive chairman of the board and David Hatfield as chief executive officer of Edgewell Personal Care, who are both being promoted internally to the new positions.

J Patrick Mulcahy gets the top job as chairman of the board for Edgewell, having already served as chairman of Energizer Holdings since 2007. He also served as CEO of Everyready Battery Company from 1985 to his retirement in 2005.

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