Citi Trends Adopts Limited Duration Stockholder Rights Plan
December 06 2023 - 5:45AM
Business Wire
Citi Trends, Inc. (NASDAQ: CTRN) (“Citi Trends” or the
“Company”) today announced that its Board of Directors (the
“Board”) has unanimously adopted a limited duration stockholder
rights plan (the “Rights Plan”).
The Rights Plan is intended to enable all stockholders to
realize the full value of their investment in Citi Trends and will
reduce the likelihood that any entity, person or group gains
control of the Company through open-market accumulation without
paying all stockholders an appropriate control premium. The Rights
Plan is also intended to provide the Board sufficient time to make
informed judgments and take actions that are in the best interests
of Citi Trends and all of its stockholders.
The Board adopted the Rights Plan in response to one of its
stockholders quickly accumulating a significant number of shares in
the open market. The Rights Plan has not been adopted in response
to any specific takeover bid or other proposal to acquire control
of the Company and is not intended to deter offers that are fair
and otherwise in the best interests of the Company and its
stockholders.
The Rights Plan is similar to stockholder rights plans adopted
by other publicly held companies. Under the Rights Plan, the Rights
generally would become exercisable only if any person (or group)
acquires 16% (or 20% for certain passive investors) or more of Citi
Trends' outstanding common stock, except that any person or group
who currently owns the triggering percentage or more may continue
to own such shares of common stock. However, any owner of the
relevant triggering percentage or more may not, subject to the
terms of the Rights Plan, acquire any additional shares without
triggering the Rights Plan. The Rights Plan does not aggregate the
ownership of stockholders “acting in concert” unless they have
formed a group, or the shares would otherwise be aggregated, under
applicable securities laws.
The Rights Plan expires on December 4, 2024, unless earlier
redeemed, exchanged or amended. The Board intends to submit the
Rights Plan to stockholders for ratification at the Company’s
upcoming Annual Meeting of Stockholders (the “Annual Meeting”) and
to terminate the Rights Plan if the proposal to ratify the Rights
Plan is not approved at that meeting. The date of the upcoming
Annual Meeting has not yet been announced. Further details of the
Rights Plan will be contained in a Form 8-K to be filed by the
Company with the U.S. Securities and Exchange Commission (the
“SEC”).
Jefferies LLC is serving as financial advisor and Vinson &
Elkins L.L.P. is serving as legal advisor to Citi Trends.
Forward-Looking
Statements
All statements other than historical facts contained in this
news release, including statements regarding the Company’s business
plans and the objectives and expectations of management, are
forward-looking statements that are subject to material risks and
uncertainties. The words “believe,” “may,” “could,” “plans,”
“estimate,” “expects,” “continue,” “anticipate,” “intend,”
“expect,” “upcoming,” “trend” and similar expressions, as they
relate to the Company, are intended to identify forward-looking
statements, although not all forward-looking statements contain
such language. Investors are cautioned that any such
forward-looking statements are not guarantees of future performance
and are inherently subject to risks and uncertainties, some of
which cannot be predicted or quantified. Actual results or
developments may differ materially from those included in the
forward-looking statements as a result of various factors, which
are discussed in our Annual Reports and Quarterly Reports on Forms
10‑K and 10‑Q, respectively, and any amendments thereto, filed with
the SEC. These risks and uncertainties include, but are not limited
to, uncertainties relating to general economic conditions,
including inflation, energy and fuel costs, unemployment levels,
and any deterioration whether caused by acts of war, terrorism,
political or social unrest (including any resulting store closures,
damage or loss of inventory) or other factors; changes in market
interest rates and market levels of wages; natural disasters such
as hurricanes; uncertainty and economic impact of pandemics,
epidemics or other public health emergencies such as the ongoing
COVID-19 pandemic; transportation and distribution delays or
interruptions; changes in freight rates; the Company’s ability to
attract and retain workers; the Company’s ability to negotiate
effectively the cost and purchase of merchandise inventory risks
due to shifts in market demand; the Company’s ability to gauge
fashion trends and changing consumer preferences; changes in
consumer confidence and consumer spending patterns; competition
within the industry; competition in our markets; the duration and
extent of any economic stimulus programs; changes in product mix;
interruptions in suppliers’ businesses; the ongoing assessment and
impact of the cyber disruption we identified on January 14, 2023,
including legal, reputational, financial and contractual risks
resulting from the disruption, and other risks related to
cybersecurity, data privacy and intellectual property; temporary
changes in demand due to weather patterns; seasonality of the
Company’s business; changes in market interest rates and market
levels of wages; the results of pending or threatened litigation;
delays associated with building, remodeling, opening and operating
new stores; and delays associated with building and opening or
expanding new or existing distribution centers. Any forward-looking
statements by the Company are intended to speak only as of the date
such statements are made. Except as required by applicable law,
including the securities laws of the United States and the rules
and regulations of the SEC, the Company does not undertake to
publicly update any forward-looking statements in this news release
or with respect to matters described herein, whether as a result of
any new information, future events or otherwise.
About Citi Trends
Citi Trends, Inc. is a leading specialty value retailer of
apparel, accessories and home trends for way less spend primarily
for African American and multicultural families in the United
States. The Company operates 606 stores located in 33 states. For
more information, visit www.cititrends.com or your local store.
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version on businesswire.com: https://www.businesswire.com/news/home/20231206598795/en/
Tom Filandro/Rachel Schacter ICR, Inc.
CitiTrendsIR@icrinc.com
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