Opnext adopts shareholder rights plan to protect use of net losses

By Jennifer Chiou

New York, June 19 - Opnext, Inc. announced that its board of directors has adopted a shareholder rights plan designed to protect the company's net operating loss carry-forwards.

To implement the rights plan, the board has declared a dividend distribution of one preferred stock purchase right on each outstanding common share. The rights will be exercisable if a person or group acquires 4.99% or more of Opnext's common stock or announces a tender offer for 4.99% or more of the common stock.

Under certain circumstances, each right will entitle stockholders to buy one one-hundredth of a share of newly created series A junior participating preferred stock at an exercise price of $17.

Opnext said that its board considers the net operating losses and other related tax attributes to be a valuable asset that could be used to reduce future potential federal and state income tax obligations.

According to a company release, the rights are designed to deter stock accumulations made without prior approval from the board that would trigger an ownership change, with the result of limiting the availability of future use of the net operating losses to Opnext.

The rights plan is not being adopted in response to any known accumulation of shares of Opnext stock, the company added.

Opnext said that the rights plan includes a procedure whereby the board will consider requests to exempt certain proposed acquisitions of common stock from the ownership trigger if the board determines that the requested acquisition will not limit or impair the availability of future use of the net operating losses to Opnext. The rights will expire on June 22, 2012 or upon the closing of a merger or acquisition transaction.

Fremont, Calif.-based Opnext is an optical technology partner of supplying systems providers and original equipment manufacturers.

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