NEW YORK, N.Y. – J.C. Penney is bolstering its shareholder rights plan, or “poison pill” — typically an effort to thwart takeover attempts.
The shareholder rights plan can now be put into effect if an individual or group acquires 4.9 per cent or more of its outstanding stock. That’s down from a 10 per cent threshold.
The corporate defence strategy allows existing shareholders to buy more shares at a very low price if that occurs.
J.C. Penney Co. said Tuesday that the purpose of lowering the threshold is to protect its ability to use certain funds that can be used for tax benefits.
The Plano, Texas-based department store chain is cutting jobs and closing stores in an effort to return to profitability.
Shares rose 6 cents to $6.57 in premarket trading Tuesday. The stock has lost two-thirds of its value over the past 12 months as J.C. Penney tries to recover from the losses and sales declines that resulted from former CEO Ron Johnson’s makeover efforts.