M&A

15 January, 2010

Krispy Kreme adopts shareholder rights

On Friday January 15, 2010, 9:33 am EST

WINSTON-SALEM, N.C. (AP) -- Krispy Kreme Doughnuts Inc. says its board approved a new shareholder rights program to replace its previous initiative that's set to expire on Monday.

The new plan, adopted to prevent what it called "abusive takeover tactics," wasn't crafted in response to any effort to acquire the doughnut maker whose treats have a dedicated following, the company said Thursday.

"Krispy Kreme believes the new rights plan, like the existing rights plan, will provide the board of directors with negotiating leverage if a third party offers to acquire the company at a price that would not provide shareholders with the full value of their investment," CEO Jim Morgan said in a statement.

Under the agreement, which is similar to the company's previous one, shareholders are awarded one "right" for each outstanding share of stock they own as of Jan. 18.

The rights become usable only if someone or a group owns 15 percent or more of Krispy Kreme's stock.

The new plan will be in place for three years.

Its shares rose a penny to $3 in morning trading Friday.