Shares of Purple Innovation Inc. PRPL, +2.30% sank 4.5% in premarket trading Monday, after the mattress maker said it adopted a shareholders rights plan, in an effort to buy time to evaluate the unsolicited buyout bid by large shareholder Coliseum Capital Management LLC. The rights plan, also known as a “poison pill,” was adopted on Sept. 25 and is effective immediately. Under terms of the rights plan, the company declared a distribution of one right for each outstanding common share, and is exercisable when an investor or group acquires a stake of 20% or more in the company; Coliseum Capital currently owns 45% of the shares outstanding. “The Special Committee adopted the Rights Plan in response to the Coliseum Proposal, Coliseum’s substantial increase in ownership of shares of Purple over the last year and the Special Committee’s desire to have the time and flexibility necessary to evaluate the Coliseum Proposal,” Purple Innovation said in a statement. The stock has gained 1.5% over the past three months through Friday but has plunged 69.9% year to date, while the Dow Jones Industrial Average DJIA, -1.62% has lost 18.6% this year.
