The Container Store Group has adopted a limited-duration stockholder rights plan, which is effective immediately and is scheduled to expire on October 7, 2025, in response to the rapid and significant accumulation of the company’s common stock by a single unidentified stock owner and to protect value for all shareholders, it stated.
The plan, the Container Store maintained, also ensures that the board remains in the best position to discharge its fiduciary duties to the company and its stockholders, guard against any stockholder obtaining undue influence over the organization through open market accumulations and provide all stockholders an opportunity to maximize the value of their Container Store investments.
Under the rights plan, shareholders of record on October 23 receive one preferred stock purchase right for each share of common stock held. The rights will become actionable if a person or group acquires 20% or more of the company’s common stock, including shares that are synthetically owned pursuant to derivative transactions or ownership of derivative securities. In that triggering event, each right will entitle its holder, other than the person or group triggering the rights plan, whose rights will become void and will not be exercisable, to purchase at the then-current exercise price additional shares of Container Store common stock at a 50% discount. Except as provided in the rights plan, commonly dubbed a poison pill, the Container Store board can redeem the rights at one cent per right. The rights will expire on October 7, 2025, but the Container Store can extend the date unless earlier redeemed or exchanged by the company or terminated.
So, under the rights plan, any person who currently owns more than the 20% triggering percentage may continue to own their shares of common stock but may not acquire any more shares without launching the rights plan.
The rights plan does not prevent any action that the board determines to be in the company or shareholder best interest, Container Store pointed out.
Asked for additional information on the plan introduction or the investor involved, Container Store declined to comment.
Filings with the United States Securities and Exchange Commission identify investor Amit Agarwal as having recently boosted his share ownership.
