HF Foods Approves Stockholder Rights Plan in Response to Potential Acquisition
HF Foods Group announced that its board has approved a limited duration stockholder rights plan and declared a dividend distribution of one right for each outstanding share of the company's common stock to stockholders of record as of the close of business on June 22. The board adopted the rights plan in response to credible indications that parties may be engaged in undisclosed stock accumulation and coordinated group formation activities aimed at gaining control of HF Foods-actions that would deprive stockholders of the opportunity to realize full value for their investment and to determine the company's strategic direction. The board has not initiated a process to sell the company. While the rights plan will be effective immediately, the rights will generally become exercisable if an entity, person, or group acquires beneficial ownership of 15% or more of the company's outstanding common stock in a transaction not approved by the board. In the event that the Rights become exercisable due to the triggering ownership threshold being crossed, each right will entitle its holder to purchase, at the then-current exercise price, additional shares of common stock having a then-current market value of twice the exercise price of the right. The rights plan has a 364-day term, expiring on June 10, 2027.
