Pier 1 Invokes Poison Pill Measure
Pier 1 Imports is trying to protect itself from potential takeover bids. So, in order to do that, the home good retailer is invoking a “poison pill” provision, also known as a “Rights Protection Agreement,” which basically protects the company from any single shareholder acquiring more than a 10 percent stake in it. Alden Global Capital, the largest active shareholder of Pier 1, published a statement yesterday calling the retailer's poison pill "a nonsensical scare tactic being used by the board to make us appear to be a threat."
Total Retail's Take: Let the feud begin. Pier 1 is clearly hoping to make it harder for anyone to complete a hostile takeover of the business. Alden Global, which paid $32.5 million for 9.5 percent of Pier 1's stock, said it was "severely disappointed" that Pier 1 has resorted to this "highly questionable form of entrenchment rather than engage constructively" with the New York-based hedge fund. Regardless, Pier 1 is in trouble. It reported a loss in the second quarter, and its board has decided it needed to pay three top executives retention bonuses.
