InsWeb (INSW) Adopts Poison Pill, Clears HSR Act in Proposed Asset Sale to Bankrate (RATE)
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InsWeb Corporation (Nasdaq: INSW), has adopted a stockholder rights plan primarily to help preserve the value of certain deferred tax assets of InsWeb Corporation ("InsWeb") generated by net operating losses and other tax benefits under Section 382 of the Internal Revenue Code.
InsWeb's ability to use its net operating losses and other tax benefits would be substantially limited by Section 382 if an "ownership change" occurred -- generally, a greater than 50-percentage point change in ownership of securities by stockholders owning (or deemed to own under Section 382 of the Code) 5 percent (5%) or more of a corporation's securities over a defined period of time. The stockholder rights plan was adopted to reduce the likelihood of an unintended "ownership change" occurring as a result of ordinary buying and selling of shares of InsWeb's common stock.
In connection with the stockholder rights plan, InsWeb has declared a dividend of one preferred share purchase right for each share of its common stock outstanding as of the close of business on December 5, 2011. After the stockholder rights plan became effective, any stockholder or group that acquires beneficial ownership of 4.9 percent (4.9%) or more of InsWeb's outstanding securities (an "acquiring person") without the approval of InsWeb's board of directors would be subjected to significant dilution in its holdings. Certain related parties will not be considered acquiring persons and existing stockholders holding 4.9 percent (4.9%) or more of InsWeb's common stock will not be considered acquiring persons unless they acquire additional shares. In addition, in its discretion, the board of directors may exempt certain persons whose acquisition of securities is determined by the board not to jeopardize InsWeb's deferred tax assets and may also exempt certain transactions.
The rights will expire on November 23, 2021, or earlier if (i) the board of directors determines the stockholder rights plan is no longer needed to preserve the deferred tax assets due to the implementation of legislative changes, (ii) the board of directors determines, at the beginning of a specified period, that no tax benefits may be carried forward, or (iii) certain other events occur as described in the stockholder rights plan. InsWeb will file a copy of its stockholder rights plan with the Securities and Exchange Commission. This filing will contain additional information about the terms and conditions of the stockholder rights plan.
InsWeb also announced that its request for early termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 was granted effective November 16, 2011 by the U.S. Federal Trade Commission and the U.S. Department of Justice, with respect to the proposed asset sale transaction with Bankrate, Inc. (Nasdaq: RATE). InsWeb's Board of Directors has set November 17, 2011 as the record for determining shareholders entitled to vote at the special meeting of stockholders, which has been set for December 21, 2011.
InsWeb's ability to use its net operating losses and other tax benefits would be substantially limited by Section 382 if an "ownership change" occurred -- generally, a greater than 50-percentage point change in ownership of securities by stockholders owning (or deemed to own under Section 382 of the Code) 5 percent (5%) or more of a corporation's securities over a defined period of time. The stockholder rights plan was adopted to reduce the likelihood of an unintended "ownership change" occurring as a result of ordinary buying and selling of shares of InsWeb's common stock.
In connection with the stockholder rights plan, InsWeb has declared a dividend of one preferred share purchase right for each share of its common stock outstanding as of the close of business on December 5, 2011. After the stockholder rights plan became effective, any stockholder or group that acquires beneficial ownership of 4.9 percent (4.9%) or more of InsWeb's outstanding securities (an "acquiring person") without the approval of InsWeb's board of directors would be subjected to significant dilution in its holdings. Certain related parties will not be considered acquiring persons and existing stockholders holding 4.9 percent (4.9%) or more of InsWeb's common stock will not be considered acquiring persons unless they acquire additional shares. In addition, in its discretion, the board of directors may exempt certain persons whose acquisition of securities is determined by the board not to jeopardize InsWeb's deferred tax assets and may also exempt certain transactions.
The rights will expire on November 23, 2021, or earlier if (i) the board of directors determines the stockholder rights plan is no longer needed to preserve the deferred tax assets due to the implementation of legislative changes, (ii) the board of directors determines, at the beginning of a specified period, that no tax benefits may be carried forward, or (iii) certain other events occur as described in the stockholder rights plan. InsWeb will file a copy of its stockholder rights plan with the Securities and Exchange Commission. This filing will contain additional information about the terms and conditions of the stockholder rights plan.
InsWeb also announced that its request for early termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 was granted effective November 16, 2011 by the U.S. Federal Trade Commission and the U.S. Department of Justice, with respect to the proposed asset sale transaction with Bankrate, Inc. (Nasdaq: RATE). InsWeb's Board of Directors has set November 17, 2011 as the record for determining shareholders entitled to vote at the special meeting of stockholders, which has been set for December 21, 2011.
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