Zenn Motor Company announced today that it's board of directors has passed a resolution which would make it more difficult for companies wishing to advance hostile bids to buy the company. The provision, if adopted by shareholders at the annual meeting, provides the board additional time to communicate share value to shareholders and or solicit additional bids from other potential buyers. It appears also to enable the board of directors to issue additional shares to existing shareholders at reduced prices:
In the event a take-over bid does not meet the Permitted Bid requirements of the Rights Plan, the rights issued under the Rights Plan will entitle shareholders, other than any shareholder or shareholders involved in the take-over bid, to purchase additional common shares of the Company at a discount to the market price of the common shares at that time.
Sources familiar with these provisions point out that there is nothing extraordinary about them. However, the timing of the announcement is intriguing since the expected delivery of a prototype EESU to Zenn appears to still be on schedule. (Source: dedicated reader pointed this out to me in private email yesterday. If he wishes to identify himself in the comment section, that would be great).
Note: The above is my interpretation of the announcement and shouldnt be confused with clarifications which come from Zenn Motor directly. Common sense dictates that if the information is important to you, get it from the source.
At the time of this posting, questions had been submitted to Zenn and are awaiting a response.
A forum thread has been started here to discuss this announcement.
I spoke with Ms. Scrimgeour yesterday and she confirmed that as of Nov 17 "no net new news". Don't ask me how that differs from no news or no new news or no gross new news.
Ms. Scrimgeour also mentioned that she is about 3,000 e-mails behind in her responses. Which do you think will happen first, a response to an e-mail submitted to Zenn today before the end of the year, or receipt by Zenn of a fully functioning production prototype ESU?
(Humor Alert) Ms. Scrimgeour also told me she schedules 30 minutes every day during which management asks her tricky questions to see if she accidently reveals "material" information. :)