BF&M announces poison pill defence

Bermuda domestic insurer BF&M has announced a “poison pill” shareholder rights plan designed to protect the company from a hostile takeover or unsolicited purchase of a substantial stake in the company.

The announcement comes after BF&M’s largest single shareholder, Camellia Holdings, said it planned to sell its 36.9% holding to BF&M rival Argus. 

BF&M, which has completed a strategic review at Camellia’s request and determined it wished to continue as a standalone insurer, said the rights plan “ensures that the Board has sufficient time to make thoughtful and prudent decisions that are in the best interests of the Company and all BF&M shareholders”.

“The rights plan does not prevent the board from engaging with any parties or accepting a transaction proposal if the board believes that such proposal appropriately recognises the value of BF&M and is in the best interests of the Company and its shareholder,” the company said in a statement released on the Bermuda Stock Exchange.

It said the rights plan was similar to other plans adopted by other publicly traded companies and was designed to “guard against attempts to acquire control

without adequate protections for the Company’s shareholders and other stakeholders”.

It said it was also designed to protect shareholder value in the company.  

It added: “Under the rights plan, the rights will become exercisable if an entity, person or group acquires beneficial ownership of 15% or more of BF&M’s outstanding common shares in a transaction not approved by the board.

“In the event that the rights become exercisable due to the triggering ownership threshold being crossed, each right will entitle its holder (which shall not include the acquiring person, entity or group triggering the Rights Plan) to purchase, at the then-current exercise price, one common share of the Company (or other securities or property of BF&M of equivalent value).

“Alternatively, upon the triggering ownership threshold being crossed (unless a person or group acquires 50% or more of the outstanding BF&M common shares), the Board may exchange each right (except those held by the acquiring person or group, which would have become void) for one additional common share or other securities or property of BF&M of equivalent value.

“Prior to the rights becoming exercisable, the rights are redeemable for $0.001 per right at the option of the Board.”

Argus has not responded to the announcement.