Barnwell Industries Adopts Limited-Duration Shareholder Rights Plan – Protecting Shareholder Interests

On January 26, 2025, Barnwell Industries, Inc. (NYSE: BRN) announced the adoption of a limited-duration shareholder rights plan (“Rights Plan”) aimed at safeguarding the company and its shareholders from potential changes in ownership structures. The Rights Plan, enacted by the Board of Directors in response to the notable ownership position held by the Sherwood Group, seeks to prevent any entity from gaining control over the company through incremental acquisitions or similar means.

The Rights Plan has been strategically designed to offer the Board of Directors ample time to make well-informed decisions that align with the best interests of both Barnwell and its shareholders. This decision was prompted by the 30.00% ownership stake held by the Sherwood Group in Barnwell’s outstanding common stock, along with unsuccessful attempts to extend the Cooperation and Support Agreement with the Sherwood Group.

To this end, a Special Committee was formed to evaluate corporate governance matters, subsequently recommending the adoption of the Rights Plan to shield all shareholders from potential adverse impacts that could result from a gradual acquisition of the company. The objective is to uphold the long-term value of investments, ensure fair and equitable treatment in the event of a proposed takeover, and prevent any attempts to commandeer control without appropriately compensating shareholders.

The Rights Plan, standard practice in the realm of publicly traded companies, involves issuing one right for each common share held as of February 7, 2025. These rights will become active if any entity acquires 20% or more of Barnwell’s outstanding common stock. Notably, existing shareholders with beneficial ownership of at least 20% are exempted from acquiring additional shares exceeding 0.25% of the overall outstanding common stock without setting off the Rights Plan.

Under the Rights Plan, in the event of activation, shareholders apart from the acquiring entity would have the opportunity to purchase Barnwell common stock at a discounted price or opt for a cashless exchange for common stock. The Rights Plan is effective immediately and is set to run for one year, unless earlier redeemed or exchanged, with any extension requiring shareholder approval.

Further details regarding the Rights Plan will be disclosed in forthcoming filings with the U.S. Securities and Exchange Commission. Barnwell encourages shareholders to engage constructively in propelling the company’s future. The company remains steadfast in maintaining its commitment to shareholder investments and business integrity amidst these strategic developments.

This article was generated by an automated content engine and was reviewed by a human editor prior to publication. For additional information, read Barnwell Industries’s 8K filing here.

Barnwell Industries Company Profile

Barnwell Industries, Inc acquires, develops, produces, and sells oil and natural gas in Canada. The company operates through three segments: Oil and Natural Gas, Land Investment, and Contract Drilling. It also acquires and develops crude oil and natural gas assets in the province of Alberta, as well as invests in land interests in Hawaii.