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back to article Micron sets a canary to watch over its stock in case of takeover

A filing in the Securities Exchange Commission has set the hounds running on speculation that Micron Technology is the latest takeover target in the ongoing consolidation of the chip business. The filing, in the arcane language of SEC documents, gets to the point in this statement: “[N]o person will become an Acquiring …

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  1. David Roberts
    WTF?

    Plain English?

    When I read the highlighted text it seemed to mean roughly:

    "If we decide to buy back shares and raise the share price and this accidentally triggers the bid rules, the person with 5% of the shares will only be considered as a real bidder on the purchase of more shares."

    This seems a very sensible precaution before buying back shares and increasing the value of individual shares. I thought this was quite common where a company had spare cash and grumpy shareholders. Part of "returning value to our shareholders" or similar.

    It doesn't seem to relate to the explanations given.

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    1. asdf
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      Re: Plain English?

      >This seems a very sensible precaution before buying back shares and increasing the value of individual shares

      But a different question is, is buying back shares a reasonable thing to do when a market is mature and consolidation is the name of the game? That cash could go towards growing the business through M&A which actually has a bad name but can be done successfully with the right people and strategy (you only remember the epic fails).

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  2. TeeCee Gold badge
    WTF?

    ...gets to the point in this statement.

    I'd hate to see how they'd put that if they wanted to beat about the bush or hide the point in bullshit.

    4 0 Reply
  3. Richard 30

    The clause is perfectly straightforward and as David Roberts rights, it simply prevents a shareholder being forced to [make a bid / make a regulatory disclosure](*) for the company because they cross a 5% minimum ownership criterion as a result of the company REDUCING its share capital and concentrating the shareholder's existing holding above 5%. If however they then purchase shares, they will be treated as having breached the 5% trigger in the normal way.

    (*) It is not clear the consequence of becoming an acquiring party is but having to bid for an entire company on breaching 5% would be a little harsh so my lazy guess is it is probably a disclosure requirement.

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    1. asdf
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      > on breaching 5% would be a little harsh so my lazy guess is it is probably a disclosure requirement.

      Pretty sure yeah that 5% is an SEC rule of disclosure on a publicly traded company.

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