Struggling retailer American Apparel Inc said it has adopted a new, one-year stockholder rights plan with a 10 percent trigger.
"The board implemented the rights plan as an additional means to ensure that all American Apparel stockholders are treated fairly," the Los Angeles-based retailer said in a statement late on Sunday.
Each right will entitle its holder to purchase, for $3.25 each, a number of shares of the company's common stock or substantially equivalent securities having a market value of twice such price, American Apparel said.
The company has been approached by private-equity firm Irving Place Capital for a possible takeover, the Wall Street Journal reported on Thursday, citing sources.
The retailer fired its Chief Executive Dov Charney last week, ending a tenure racked with sexual assault allegations and scandal.
In July, Charney increased his ownership of American Apparel to about 43 percent through a loan from hedge fund Standard General, although the fund controls his stake as collateral.
Standard General has placed several affiliates on the retailer's board and has plotted a future for the struggling company with or without Charney.
© 2017 Reuters All rights reserved.
