Mercury Systems Inc. MRCY, +1.53% said Tuesday that it has adopted a one-year shareholder rights plan, also known as a “poison pill,” as protection from a hostile takeover during a period in which the aerospace and defense technologies company believes its stock is undervalued. The stock, which were indicated up nearly 4% in premarket trading, has tumbled 37.1% year to date, while the S&P 500 SPX, +0.17% has rallied 27.6% this year. The rights plan comes after the company disclosed on Dec. 23 that Jana Partners LLC had acquired a 6.6% stake in Mercury, saying they believed the shares are “undervalued and represent an attractive investment opportunity.” As part of the rights plans, Mercury said it will distribute one “right” for each common share outstanding as of Jan. 10, 2022. “Rights,” which gives holders the right to buy preferred shares having a value of twice the market value of common shares, becomes exercisable if a person or group acquires beneficial ownership of 7.5% or more of the outstanding shares. “By adopting the Rights Plan, the board intends to enable all shareholders to realize the full potential value of their investment in Mercury while reducing the likelihood that any person or group gains control of the company without paying full and fair value,” the company said in a statement.
