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CYGNUS THERAPEUTIC SYSTEMS ANNOUNCESADOPTION OF A SHAREHOLDER RIGHTS PLAN

 REDWOOD CITY, Calif., Sept. 21 /PRNewswire/ -- The board of directors of Cygnus Therapeutic Systems (NASDAQ: CYGN) today declared a dividend distribution of one preferred share purchase right on each outstanding share of its common stock. The rights are designed to assure that all shareholders receive fair and equal treatment in the event of any proposed takeover of the company, to guard against partial tender offers, squeeze-outs, open market accumulations and other abusive tactics to gain control of the company without paying all shareholders a control premium.
 The rights will be exercisable only if a person or group acquires 15 percent or more of the combined number of the company's common stock or announces a tender offer the consummation of which would result in ownership by a person or group of 15 percent or more of the company's common stock. Each right will entitle shareholders to buy one one- hundredth of a share of a new series of junior participating preferred stock at an exercise price of $40.00 upon certain events.
 If, after the rights become exercisable, Cygnus Therapeutic Systems is acquired in a merger or other business combination transaction, or sells 50 percent or more of its assets or earnings power, each right will entitle its holder to purchase, at the right's then-current price, a number of the acquiring company's common shares having a market value at the time of twice the right's exercise price.
 In addition, if a person or group acquires 15 percent or more of the combined number of the company's outstanding common stock, otherwise than pursuant to a tender offer for all shares which is determined by the board of directors to be fair and in the best interests of the company and its shareholders, each right will entitle its holder (other than such person or members of such group) to purchase, at the right's then-current exercise price, a number of the company's common shares (or cash, other securities or property) having a market value of twice the right's exercise price.
 Following the acquisition by a person or group of beneficial ownership of 15 percent or more of a combined number of the company's common stock and prior to an acquisition of 50 percent or more of a combined number of the company's common stock, the board of directors may exchange the rights (other than rights owned by such person or group), in whole or in part, at an exchange ratio of one share of common stock (or one one-hundredth of a share of the new series of junior participating preferred stock) per right.
 At any time prior to 10 days after a person or group has acquired beneficial ownership of 15 percent or more of the combined number of the company's common stock, the rights are redeemable for one cent per right at the option of the board of directors.
 The rights are intended to enable all shareholders to realize the long-term value of their investment in the company. The rights will not prevent a takeover, but should encourage anyone seeking to acquire the company to negotiate with the board of directors prior to attempting a takeover.
 The dividend distribution will be made on Oct. 18, 1993, payable to shareholders of record on that date. The rights will expire on Oct. 18, 2003. The initial distribution of rights is not taxable to shareholders.
 Cygnus is a leader in advanced transdermal delivery systems. The company's primary focus is the smoking cessation, hormone replacement, glucose monitoring and consumer products markets. The company has more than a dozen products in various stages of development including a proprietary seven-day patch to administer estradiol for treatment of menopausal symptoms and osteoporosis.
 -0- 9/21/93
 /CONTACT: Craig Carlson of Cygnus, 415-369-4300/
 (CYGN)


CO: Cygnus Therapeutic Systems ST: California IN: MTC SU: SRP

TB-TM -- SJ003 -- 4438 09/21/93 19:17 EDT
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Publication:PR Newswire
Date:Sep 21, 1993
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