Nabi Biopharmaceuticals (NABI) Adopts Shareholder Rights Agreement
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Nabi Biopharmaceuticals (Nasdaq: NABI) today announced that its Board of Directors adopted a stockholder Rights Agreement designed to preserve its substantial net operating loss (NOL) tax assets.
From the release: "As of December 25, 2010, Nabi had net operating loss carry-forwards of approximately $178 million. Unless otherwise restricted, Nabi can utilize these tax attributes in certain circumstances to offset future U.S. taxable income. The Board of Directors believes that the NOL Rights Agreement serves the interests of all stockholders as it is designed to protect the use of its substantial deferred tax assets to offset future tax liabilities.
Nabi's ability to use the tax attributes would be substantially limited if there were an "ownership change" as defined under Section 382 of the U.S. Internal Revenue Code and related U.S. Treasury regulations. In general, an ownership change would occur if Nabi's "5-percent shareholders," as defined under Section 382, collectively increase their ownership in Nabi by more than 50 percentage points over a rolling three-year period. Accordingly, the NOL Rights Agreement has a three-year term, although Nabi's Board of Directors has determined to review the plan periodically in light of developments at the company, including in connection with the use and value of the NOLs, to assess whether the NOL Rights Agreement should be maintained.
Nabi's Board of Directors declared a non-taxable dividend of one preferred share purchase right for each outstanding share of its common stock. The preferred share purchase rights will be distributed to stockholders of record as of August 25, 2011, but would only be activated if triggered by the Rights Agreement. Effective today, if any person or group acquires 4.99 percent or more of the outstanding shares of common stock, there would be a triggering event under the Rights Agreement resulting in significant dilution in the ownership interest of such person or group in Nabi stock. Stockholders who currently beneficially own 4.99 percent or more of the outstanding shares of common stock will not trigger the preferred share purchase rights unless they acquire additional shares.
The issuance of the preferred share purchase rights will not affect Nabi's reported earnings per share and is not taxable to Nabi or its stockholders."
From the release: "As of December 25, 2010, Nabi had net operating loss carry-forwards of approximately $178 million. Unless otherwise restricted, Nabi can utilize these tax attributes in certain circumstances to offset future U.S. taxable income. The Board of Directors believes that the NOL Rights Agreement serves the interests of all stockholders as it is designed to protect the use of its substantial deferred tax assets to offset future tax liabilities.
Nabi's ability to use the tax attributes would be substantially limited if there were an "ownership change" as defined under Section 382 of the U.S. Internal Revenue Code and related U.S. Treasury regulations. In general, an ownership change would occur if Nabi's "5-percent shareholders," as defined under Section 382, collectively increase their ownership in Nabi by more than 50 percentage points over a rolling three-year period. Accordingly, the NOL Rights Agreement has a three-year term, although Nabi's Board of Directors has determined to review the plan periodically in light of developments at the company, including in connection with the use and value of the NOLs, to assess whether the NOL Rights Agreement should be maintained.
Nabi's Board of Directors declared a non-taxable dividend of one preferred share purchase right for each outstanding share of its common stock. The preferred share purchase rights will be distributed to stockholders of record as of August 25, 2011, but would only be activated if triggered by the Rights Agreement. Effective today, if any person or group acquires 4.99 percent or more of the outstanding shares of common stock, there would be a triggering event under the Rights Agreement resulting in significant dilution in the ownership interest of such person or group in Nabi stock. Stockholders who currently beneficially own 4.99 percent or more of the outstanding shares of common stock will not trigger the preferred share purchase rights unless they acquire additional shares.
The issuance of the preferred share purchase rights will not affect Nabi's reported earnings per share and is not taxable to Nabi or its stockholders."
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