Wednesday, January 7, 2009

Selectica's poison pill

As I noted yesterday: on December 22, Selectica filed a complaint in Delaware looking for a declaratory judgment upholding its poison pill provisions, and therevy beating back what looks like a gradual take-over attempt by the defendants in that action, Trilogy and its subsidiary, Versata.

It doesn't appear that the court has taken any action in the interim.

The poison pill (or "rights plan") involved had/has a 4.99% beneficial ownership trigger. [Those of us who are following the CSX/TCI mess know what a controversy-generating concept "beneficial ownership" itself can be.]

The company has described the goal of the plan as "to help protect the value of the company's net operating loss carryforwards while continuing to provide customary protections against abusive takeover tactics."

What is new here is that the board of directors pulled the trigger on January 2, announcing that the company is doubling the number of shares of common stock held by all its stockholders except for Versata and Trilogy.

Selectica registered the resulting new securities with the SEC on Monday, January 5.

Passage of a threshold amount by a particular acquirer is sometimes called a "flip-in event." In a case like this, it might better be called a flip-the-bird event.

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