27 Jan Iconix Brand Group Adopts Poison Pill Plan
Iconix Brand Group Inc. has adopted a short-term shareholder rights plan, or poison pill plan, to protect the interests of the company and its shareholders in the event of a takeover.
The company said its board adopted the plan “in light of recent activity in the company’s shares, including the recent accumulation of meaningful positions by holders of derivative securities, and what the Iconix Board and management believes is a currently depressed share price for the company’s common stock.”
As reported, Sports Direct, the UK-based sport goods giant, recently acquired a 14.4 percent stake in Iconix. Sports Direct has said its acquisition of a stake in Iconix as well as a small one in Dick’s Sporting Goods were made ”to allow Sports Direct to hopefully build a relationship and develop commercial partnerships with the relevant parties. They also help the company to build relationships with key suppliers and brands.”
Iconix said its shareholders rights plan reduces the likelihood that any person or group gains control of Iconix through open market accumulation or other tactics without paying an appropriate control premium and by providing the board and shareholders with time to make informed decisions. The Rights Plan applies equally to all current and future shareholders and is not intended to deter offers that are fair and otherwise in the best interests of the company and its shareholders.
Drew Cohen, lead director of Iconix, commented, “This short-term plan is consistent with our commitment to ensuring that all Iconix shareholders realize the long-term value of their investment. The Iconix Board and management are focused on driving the company’s success and addressing the issues that have impacted more recent performance. We are continuing to make progress on our refinancing plans and are also working towards a resolution with the SEC Staff as it relates to the comment letter process.”
Pursuant to the Rights Plan, one preferred stock purchase right will be distributed for each share of common stock held by shareholders of record on Feb. 12, 2016. The rights will become exercisable only if a person or group acquires beneficial ownership of 20 percent or more of the company’s common stock (including in the form of synthetic ownership through derivative positions). In that situation, each holder of a right (other than, as detailed in the Rights Plan, the person or group triggering the rights) will be entitled to purchase, at the then-current exercise price (which was initially set at $30 per right), shares of common stock (and, in certain circumstances, other consideration) having a value of twice the exercise price of the right (a 50 percent discount). Rights held by any person or group whose actions trigger the Rights Plan, including potentially counterparties to derivative transactions with such person or group, would become void.
Guggenheim Securities, LLC is acting as financial advisor to Iconix, and Blank Rome LLP and Skadden, Arps, Slate, Meagher & Flom LLP are legal advisors.
Iconix’s sports-related brands include Starter, Umbro, Ocean Pacific, Danskin and Pony. Sports Direct had owned a 30 percent stake in Umbro before its sale to Nike in 2007.
Iconix also owns Candie’s, Bongo, Badgley Mischka, Joe Boxer, Rampage, Mudd, Mossimo, London Fog, Rocawear, Cannon, Royal Velvet, Fieldcrest, Charisma, Waverly, Zoo York, Sharper Image, Lee Cooper, Ecko Unltd. and Marc Ecko. In addition, Iconix owns interests in the Artful Dodger, Material Girl, Peanuts, Ed Hardy, Truth Or Dare, Billionaire Boys Club, Ice Cream, Modern Amusement, Buffalo and Nick Graham.