Bausch Health Announces Adoption of Shareholder Rights Plan
On April 14, 2025, Bausch Health Companies Inc. (BHC) announced that its board of directors had approved the adoption of a shareholder rights plan (SRP). This plan was put in place through an agreement with TSX Trust Company, acting as rights agent, effective as of the same date.
Why Was the SRP Adopted?
The primary reason for the adoption of the SRP was to protect the interests of all Bausch Health shareholders. The SRP is designed to help ensure that any unsolicited take-over bid or acquisition of control of the Company is treated fairly and equally among all shareholders.
Additionally, the SRP provides the Board with the opportunity to identify, solicit, develop, and negotiate value-enhancing alternatives to any unsolicited take-over bid or similar transaction. This can help to maximize shareholder value and ensure that the Company remains focused on its strategic objectives.
Impact on Individual Shareholders
If an unsolicited take-over bid is made for Bausch Health, each shareholder will receive a distribution of subscription rights. These rights will allow shareholders to purchase additional shares at a discounted price. This can help to mitigate the dilutive effect of a take-over bid and ensure that existing shareholders maintain their relative ownership stake in the Company.
Impact on the World
The adoption of the SRP by Bausch Health is a common practice among publicly-traded companies. It is designed to protect shareholder value and ensure that the Board has the time and flexibility to consider all options in the event of an unsolicited take-over bid. This can help to maintain stability in the market and prevent potential undervaluation of the Company.
Conclusion
Bausch Health’s adoption of a shareholder rights plan is a proactive step to protect the interests of its shareholders and ensure that the Company remains focused on its strategic objectives. By providing all shareholders with the opportunity to purchase additional shares at a discounted price in the event of an unsolicited take-over bid, the SRP helps to mitigate dilution and maintain the relative ownership stake of existing shareholders. This practice is common among publicly-traded companies and can help to maintain stability in the market and prevent potential undervaluation of the Company.
- Bausch Health adopts shareholder rights plan to protect shareholder interests
- SRP allows for identification of value-enhancing alternatives to take-over bids
- Shareholders receive distribution of subscription rights in event of take-over bid
- SRP helps maintain stability in the market and prevent undervaluation
