MALVERN, PA — Galera Therapeutics, Inc. (Nasdaq: GRTX) today unveiled a strategic move to safeguard its stockholders by adopting a limited duration stockholder rights agreement, commonly referred to as a “poison pill.” This decision by the Board of Directors aims to ensure that all investors can reap the full benefits of their stakes in the company and to thwart any attempts by individuals or groups to seize control of Galera without offering a fair premium.
The rights plan comes in the wake of notable accumulations of Galera’s shares, prompting the Board to take measures that not only protect the company’s and its shareholders’ interests but also give the Board ample time to make decisions that align with the long-term goals of the company. Importantly, this plan is not designed to stop the Board from entertaining any acquisition offers that might benefit the shareholders.
Under this agreement, Galera will distribute one preferred share purchase right for each outstanding common share to its stockholders on record as of May 20, 2024. These rights will be initially non-exercisable and will accompany the Galera common shares.
Scheduled to expire on May 2, 2025, the rights agreement will be reassessed by the Board for possible early termination depending on the circumstances. The plan activates only if an individual or group acquires a beneficial ownership of 10% or more of Galera’s common stock without the Board’s approval. In such an event, every rights holder, except the acquiring party whose rights will become null, will have the chance to buy additional shares at half price.
Furthermore, the Rights Agreement includes a provision allowing the company to redeem the rights at $0.001 per right, barring certain conditions. It also stipulates that individuals or groups already owning 10% or more of the company’s shares before the announcement of the Rights Agreement will maintain their current ownership levels. However, should these entities acquire more shares post-announcement, the rights will become exercisable by other stockholders.
This protective measure aligns with practices by other publicly-held companies to prevent unfriendly takeovers. Legal counsel Sidley Austin LLP supports Galera in this initiative, emphasizing the company’s commitment to defending its stockholders’ interests while navigating the complex landscape of corporate ownership and control.
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