Fred's Adopts Shareholder Rights Plan After 'unusual And Substantial' Activity In Its Shares | Fox Business

Fred's Inc. said Tuesday its board has unanimously approved a shareholder rights plan, following "unusual and substantial" activity in its shares. The rights plan, also known as a poison pill, is designed to prevent a hostile takeover of the company and to avoid certain default provisions of its credit facilities from being triggered. The plan will give shareholders one right for each share owned and will have a 10% ownership trigger. Last week, the stock had its biggest one-day gain after news the retailer was acquiring 865 Rite Aid stores in a move that could propel the company into the Top 3 in the drugstore game. Shares were not yet active premarket, but have gained 23% in the year so far, while the S&P 500 has gained 11%.