With Icahn Lurking, Mentor Graphics Adopts Holder Rights Plan

Mentor Graphics (MENT) this morning announced that its board has adopted a shareholder rights plan, in a move obviously in response to the increasingly large stake in the company held by investor Carl Icahn. This week, he lifted his holdings in the electronic design automation software company to 9.5%.

Mentor is issuing one “incentive stock purchase right” for each common share held as of July 6. The company said the rights are intended to “protect the company and to allow all of the company’s shareholders to realize the long-term value of their investment in the company,” but that it is “not intended to prevent a sale of control of the company that is determined by the board of directors to be fair, advisable and in the best interests of all the Mentor Graphics shareholders.”

The rights will be exercisable if any investor without board approval acquires 15% or more of the company’s common stock, or announced a tender offer for 15% or more of the stock. The rights entitle holders of the stock to buy more stock at a 50% discount – but rights held by the person triggering the rights would not be exercisable.

MENT is up 3 cents, at $9.28.

Get the message, Carl?

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