The Qualstar Corp. board of directors adopted on Wednesday a poison pill provision in response to a takeover attempt by the Simi Valley company’s second largest shareholder.
The Qualstar board took the step in response to an offer by Steven Bronson to buy 3 million shares at a cost of $1.65 per share. Bronson is the second largest shareholder in Qualstar with 2.3 million, or 18.7 percent, of shares. The largest shareholder is William Gervais, a co-founder and former chief executive of Qualstar.
“The board adopted the rights agreement to protect shareholders from coercive or otherwise unfair takeover tactics,” the company said in a filing with the U.S. Securities and Exchange Commission.
The poison pill, or shareholder right’s plan, provision takes effect if an individual or group buys 10 percent or more of the common stock in the tape storage and power products manufacturer without approval by the board. It would both create a second, preferred class of stock and flood the market with additional shares, diluting individual stakes.
The poison pill provision is not intended to discourage any merger or acquisition with third party companies or individuals the Qualstar board has approved.
Shareholders have until Feb. 28 to sell to Bronson, chief executive of Boca Raton, Fla.-based BKF Capital Group Inc. Bronson also is seeking to elect his own slate of board candidates at the next annual meeting.
Also, Wednesday Qualstar reported fiscal second quarter earnings showing the company did not meet analyst forecasts in revenue or earnings per share.
Qualstar reported a net loss of $1.7 million (14 cents a share) for the quarter ending Dec. 31 compared, with a net loss of $971,000 (8 cents) in the same period a year earlier. Revenue fell 5.6 percent to $3.4 million.
Analysts forecast a per share loss of 8 cents on revenue of $3.56 million, according to Thomson Financial Network.