LEHI, Utah — Nearly a week after receiving the initial offer, Purple Innovation said it has formed a special committee to consider a proposal Coliseum Capital Management made to purchase the outstanding capital stock it does not already own for $4.35 per share in cash.
Made up of independent directors Gary DiCamillo, Claudia Hollingsworth, Paul Zepf and Dawn Zier, the committee said it will determine the course of action that is in the best interest of all of Purple’s shareholders. As of Monday afternoon, it said it had not reached any conclusion regarding the “advisability or feasibility of a potential transaction.”
The committee also said it adopted a Rights Plan on Sept. 25 — essentially a poison pill — in response to the Coliseum proposal. The DTC mattress company declared a distribution of one right for each outstanding share of common stock. It is effective immediately and will expire on Sept. 25, 2023 unless the committee decides to terminate the plan earlier. The company has established a record date of Oct. 5 for the rights.
This plan is meant to allow company shareholders “to realize the full value of their investment and to guard against any attempts to gain control of the company without paying all shareholders an appropriate control premium.,” it said in a release.
It also applies equally to all current and future shareholders and does not “deter any offer or preclude the special committee from considering an offer that is fair and otherwise in the best interests of Purple shareholders.”
The company said the rights “will be exercisable only if a person or group acquires beneficial ownership (including certain synthetic equity positions created by derivative securities) of 20% or more of Purple’s outstanding shares of common stock.” Anyone owning more than the triggering percentage may not acquire any additional shares without triggering the plan.