Cott, whose stock is fizzing up because of rumors of a merger with Cadbury Schweppes‘ drinks division, said Wednesday that its board has approved a shareholder rights plan to discourage a hostile takeover.
The Canadian soft drink maker, which bottles beverages for Wal-Mart Stores and other major retailers, said in a statement the plan would give shareholders the right to purchase common shares at a discount if it receives an unwanted bid.
“In connection with this strategic review, Cott has adopted the rights plan to protect shareowners of Cott against opportunistic and other unfair takeover tactics,” the statement said. “The purpose of the rights plan is to provide the board with time to review any unsolicited takeover bid that may be made and to take action, if appropriate, to enhance shareowner value. Cott is not aware of any such pending takeover bid.”
Following a decision earlier this month by Cadbury to split its drinks division from its confectionary business, The Wall Street Journal reported that Cott was in talks with private equity firms about a merger with the Cadbury unit.