United Airlines Holdings Inc has said that it is seeking shareholder approval for a rights offering as part of a plan to thwart any hostile takeover moves and preserve an $8.2 billion tax benefit.
Chicago-based United said that it had net federal operating loss carryforwards of approximately $8.2 billion as of September 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.
Plan Details
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.
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