Mentor’s Poison Pill

Mentor isn’t going to let Carl Icahn break up the company without a fight.

That’s my take, given the EDA software company’s latest maneuver. Mentor has adopted something called a “Shareholder Rights Plan,” in which it will grant each of its shareholders the opportunity to purchase one discounted share for each share of common stock currently held. This option to buy kicks in if a person, alone or as part of a group effort, accumulates 15% or more of Mentor stock (or announces an offer to do so).

The move “enables the board to protect the company and to allow all of the shareholders to realize the long-term value of their investment,” the firm said in a press release.

This is a variation of the traditional poison pill defense some companies take when they are perceived to be in play by unwanted investors. The idea is to either slow down the third party, giving the board time to find a more desirable buyer, or to make it so expensive to acquire a controlling stake in the company, the third party will give up.

I, for one, am glad to see Mentor taking this step.

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About Mike

Mike Buetow is editor-in-chief of Circuits Assembly magazine, the leading publication for electronics manufacturing, and PCD&F, the leading publication for printed circuit design and fabrication. He is also vice president and editorial director of UP Media Group, for which he oversees all editorial and production aspects. He has more than 20 years' experience in the electronics industry, including six years at IPC, an electronics trade association, at which he was a technical projects manager and communications director. He has also held editorial positions at SMT Magazine, community newspapers and in book publishing. He is a graduate of the University of Illinois. Follow Mike on Twitter: @mikebuetow