Broadway Financial Corporation Announces Adoption of Stockholder Rights Plan
September 11 2019 - 9:30AM
Business Wire
Broadway Financial Corporation (the “Company”) (NASDAQ Capital
Market: BYFC), the parent company of Broadway Federal Bank, f.s.b.,
today announced that its board of directors approved a stockholder
rights plan (the “Rights Plan”) on September 10, 2019. The board’s
purpose in adopting the Rights Plan is to protect the Company’s
stockholders against the possibility of attempts to acquire control
of or influence over the Company through open market or privately
negotiated purchases of the Company’s common stock without payment
of a fair price to all of the Company’s stockholders or through
other tactics that do not provide fair treatment to all
stockholders.
The Rights Plan, which was approved by the board of directors
after consultation with the Company’s legal and financial advisors,
is similar to rights plans that have been adopted by many public
companies. Adoption of the Rights Plan is intended to encourage a
potential acquiror of the Company to negotiate directly with the
board of directors, and to assist the board in seeking to obtain
the greatest value available to stockholders. The Rights Plan will
not interfere with any merger, acquisition or business combination,
or capital financing opportunity, that the Company’s board of
directors believes to be in the best interest of the Company’s
stockholders.
In connection with the Rights Plan, the Board has declared a
dividend distribution of one preferred stock purchase right (a
“Right”) for each outstanding share of the Company’s common stock
and nonvoting common stock (collectively, the Company’s “Common
Shares”) held by stockholders of record on September 23, 2019. Each
Right will initially entitle a holder, upon the occurrence of
certain events, to purchase, for an exercise price of $3.60 per
Right, one one-thousandth of a share of Series B Junior
Participating Preferred Stock of the Company, which would have
voting and economic rights equivalent to one share of common stock
of the Company. The Rights distribution is not expected to be
taxable to stockholders.
The Rights will not become exercisable unless, with certain
exceptions, an investor, including the investor’s affiliates and
associates (each as defined in the Rights Plan), acquires
beneficial ownership of 10% or more of the Company’s Common Shares,
or announces a tender offer that would result in the investor,
together with the investor’s affiliates and associates, owning 10%
or more of the Company’s Common Shares. For this purpose, an
investor will be deemed to have beneficial ownership of Common
Shares that are owned by persons and entities with whom the
investor has an agreement, arrangement or understanding for the
purpose of acquiring, holding, voting or disposing of Common Shares
or any other securities of the Company, as well as Common Shares
held by persons or entities who are acting in concert with the
investor to obtain control of, or to exercise a controlling
influence over the management or policies of, the Company.
The Rights Plan excludes from its 10% ownership trigger level
any investor who, alone or together with the investor’s affiliates
and associates, currently owns 10% or more of the Company’s Common
Shares, but such investors would lose their exempted status if they
acquire additional Common Shares, or if their ownership of Common
Shares falls below the 10% trigger level, after the date the Rights
Plan was adopted.
If an investor (an “Acquiring Person”), alone or together with
the investor’s affiliates and associates, acquires beneficial
ownership of 10% or more of the Company’s outstanding Common
Shares, the Rights will automatically convert to rights entitling
their holders, other than the Acquiring Person, its affiliates and
associates, and their transferees, to purchase Common Shares from
the Company, in lieu of Series B Junior Participating Preferred
Stock, at half of the then current market price of the Common
Shares, up to the amount of the purchase price under the Rights.
Alternatively, the Company would have the right, subject to certain
limitations, to exchange all or part of the Rights for Common
Shares of the Company at an exchange ratio of one Common Share, or
preferred shares having equivalent value as determined by the board
of directors, for each Right exchanged.
The Rights Plan may be terminated or amended by the Board at any
time prior to the Rights becoming exercisable and may be amended
thereafter in any manner that would not adversely affect the
interests of the holders of Rights. In addition, the Company’s
board of directors may elect to redeem the Rights at a redemption
price of $0.001 per Right at any time before the triggering 10%
ownership level has been reached, which redemption price may be
paid in cash, Common Shares or other consideration. The Rights will
expire on September 10, 2029, unless earlier redeemed or exchanged
by the Company.
More detailed information regarding the Rights Plan and the
Rights that will be distributed to the holders of the Company’s
Common Shares will be provided in a Current Report on Form 8-K that
the Company will file with the Securities and Exchange Commission.
A copy of the Rights Agreement comprising the Rights Plan and
setting forth the terms of the Rights will be attached as an
exhibit to the Form 8-K filing.
__________________
About Broadway Financial Corporation
Broadway Financial Corporation conducts its operations through
its wholly-owned subsidiary, Broadway Federal Bank, f.s.b., which
is the leading community-oriented savings bank in Southern
California serving low-to-moderate income communities. We offer a
variety of residential and commercial real estate loan products for
consumers, businesses, and non-profit organizations, other loan
products, and a variety of deposit products, including checking,
savings and money market accounts, certificates of deposits and
retirement accounts. The Bank operates three full service branches,
two in the city of Los Angeles, and one located in the nearby city
of Inglewood, California.
Shareholders, analysts and others seeking information about the
Company are invited to write to: Broadway Financial Corporation,
Investor Relations, 5055 Wilshire Blvd., Suite 500, Los Angeles, CA
90036, or visit our website at www.broadwayfederalbank.com.
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version on businesswire.com: https://www.businesswire.com/news/home/20190911005251/en/
Brenda J.
Battey, Chief Financial Officer, (323) 556-3264; or
investor.relations@broadwayfederalbank.com
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