KENNETT SQUARE, Pa., Oct. 14 /PRNewswire/ -- ElderTrust (NYSE: ETT), an
equity healthcare REIT, announced today that its Board of Trustees has adopted
a Shareholder Rights Plan (the "Rights Plan") in which preferred stock
purchase rights have been granted as a distribution at the rate of one right
for each common share held on the record date. The company has set the close
of business on October 29, 1999 as the record date.
The Rights Plan, which is similar to plans adopted by more than 2,000
publicly traded companies and many other REITs, is designed to deter coercive
or unfair takeover tactics. The Company's adoption of the Rights Plan is
intended only to protect the rights of its shareholders and is not in response
to any acquisition proposal. The Rights Plan will assist the board of
trustees in dealing with any future actions taken by hostile entities which
attempt to deprive the Company and its shareholders of the opportunity to
obtain the most attractive price for their shares.
In implementing the Rights Plan, the board has declared a distribution of
one right for each of the Company's outstanding common shares. Each right
initially would entitle the holder thereof to purchase 1/1,000th of a
preferred share at $35.00. One one-thousandth of a preferred share is
intended to be approximately the economic equivalent of one common share. The
rights will expire on Oct. 13, 2009.
At the time of adoption of the Rights Plan, the rights are neither
exercisable nor traded separately from the common shares. The rights will be
exercisable only if a person or group in the future becomes the beneficial
owner of 15% or more of the common shares or announces a tender or exchange
offer which would result in its ownership of 15% or more of the common shares,
subject to certain exceptions for any persons who are "Excluded Holders" under
the Company's declaration of trust (but only up to the "Excluded Holder
Limit," as described therein, of 15% of the outstanding common shares).
Ten days after a public announcement that a person or group of persons
have become the beneficial owner of 15% or more of the common shares, each
holder of a right, other than the acquiring person, would be entitled to
purchase $70.00 worth of common shares of the Company for $35.00. If, after a
person has become the beneficial owner of 15% or more of the common shares,
the Company is acquired in a merger or 50% or more of the Company's assets,
including the assets held by ElderTrust Operating Limited Partnership and any
subsidiaries of the Company, are sold in one or more related transactions,
each right would entitle the holder thereof to purchase common stock of the
acquiring company at half of the then-current market price of the acquiring
company's common stock.
At any time after a person or group of persons becomes the beneficial
owner of 15% or more of the common shares, the board of trustees may exchange
one common share for each right, other than rights held by the acquiring
person.
The board of trustees generally may redeem the rights at any time until
ten days following the public announcement that a person or group of persons
has acquired beneficial ownership of 15% or more of the outstanding common
shares. The redemption price is $0.005 per right. Under certain
circumstances, the decision to redeem the rights will require the concurrence
of a majority of the Continuing Trustees, defined generally to mean any member
of the board who was a member prior to the date of the rights agreement, any
person who is subsequently elected to the board if such person was recommended
or approved by a majority of the Continuing Trustees and any other person who
is subsequently elected to the board, provided that such other person shall
not be deemed a "Continuing Trustee" as to any vote on the redemption,
modification or termination of the rights until the lapse of 180 days from the
date of such person's election or appointment to the board.
The board of trustees also has approved certain amendments to the
partnership agreement of ElderTrust Operating Limited Partnership to provide
anti-dilution rights to limited partners in the event any rights are ever
exercised.
Details of the Rights Plan will be mailed to all shareholders of the
Company. ElderTrust is a real estate investment trust that invests in real
estate properties used in the healthcare services industry, principally along
the East Coast of the United States. Since commencing operations in
January 1998, the Company has acquired direct and indirect interests in 31
buildings and has loans outstanding of $49 million in construction and term
financing on eight additional healthcare facilities.
Certain matters discussed within this press release may be deemed to be
forward-looking statements within the meaning of the Private Securities Act of
1995. Although ElderTrust believes the expectations reflected in such
forward-looking statements are reasonable assumptions, it can give no
assurance that its expectations will be attained. Factors that could cause
actual results to differ materially from ElderTrust's expectations include
real estate conditions, the Company's ability to refinance its existing bank
credit facility, changes in the economic conditions and other risks detailed
from time to time in the Company's SEC reports and filings. The Company
assumes no obligation to update or supplement forward-looking statements that
become untrue because of subsequent events.
For more information on ElderTrust via fax at no charge, please dial
1-800-PRO-INFO and enter ticker symbol ETT, or visit ElderTrust's Web site at
http://www.eldertrust.com .
SOURCE ElderTrust
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Related links:
http://www.eldertrust.com
CONTACT:
D. Lee McCreary, Jr., President and Chief
Executive Officer, Chief Financial Officer of ElderTrust,
610-925-4200
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