Embattled prepaid wireless service platform provider Boston Communications Group Inc. has granted preferred stock purchase rights for its shareholders in an effort to stave off any possible takeover attempt.
The rights, which will trade automatically with the underlying common stock, may be exercised only if an investor acquires, or makes an offer for, 15 percent or more of BCGI’s common stock. Until a right is exercised, the holder of that stake would have no rights as a shareholder of BCGI.
BCGI has said it plans to appeal last week’s federal court decision that let stand a $128 million judgment against it in a patent infringement suit brought by Freedom Wireless. Carriers Cingular Wireless L.L.C., AT&T Wireless Services Inc., CMT Partners and Western Wireless Corp. also were held liable in the upheld ruling.
BCGI, which has said it could be forced into bankruptcy by the judgment, hopes the preferred purchase rights will keep would-be corporate raiders at bay as it appeals the decision.
“The board believes the rights agreement is a prudent measure designed to deter possible coercive or unfair takeover tactics, however remote, that could impair the board’s ability to represent shareholders’ interests fully,” said E.Y. Snowden, BCGI’s chief executive officer. “We have taken this step to safeguard the interests of our shareholders so that they receive fair and equal treatment in the event of any proposed takeover of BCGI.”
The company’s stock was up 4 cents to $1.12 in mid-day trading on the Nasdaq Wednesday. BCGI shares had traded for nearly $10 earlier this year before plummeting on news of the initial Freedom ruling.
