Starz is adopting a so-called “Poison Pill” after the media mogul Byron Allen acquired 10.7 percent of the company last week in a surprise deal.
The poison pill, also called a shareholder rights plan, is typically enacted by companies seeking to ward off hostile or unwelcome acquisition efforts. The plan adopted by Starz would kick in if any one shareholder acquired 17.5 percent of more of the company, and would allow for other shareholders to purchase shares in the company at a 50 percent discount, effectively diluting the activist.
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Typically the plan is meant to force talks with the activist to better understand their motives and intentions.
Allen, through his family office, paid $25 million for the stake in Starz, which was spun off from Lionsgate last year, buying it from former Treasury Secretary Steven Mnuchin’s investment firm Liberty 77.
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