United Airlines unveils rights issue plan to protect tax assets
Sat Dec 05 2020
Mark Cooper (2129 articles)

United Airlines unveils rights issue plan to protect tax assets

United Airlines Holdings Inc said on Friday it was seeking shareholder approval for a rights offering as part of a plan to thwart any hostile takeover moves and preserve a $8.2 billion tax benefit.

Chicago-based United said it had net federal operating loss carryforwards of about $8.2 billion as of the Sept. 30 that would be at risk if the company changed ownership.

Shares in United have declined due to the sharp drop for air travel caused by the COVID-19 pandemic, making it vulnerable to takeovers.

Under the plan, United will issue one preferred share purchase right in the form of a dividend for each outstanding share of common stock to certain shareholders.

Shareholders that opt for the rights could only exercise them if a person or group acquires a stake of 4.9% or more without the board’s consent, United said.

United’s stock closed down 1.34% at $49.24 on Friday before the announcement.

Mark Cooper

Mark Cooper

Mark Cooper is Political / Stock Market Correspondent. He has been covering Global Stock Markets for more than 6 years.

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