FXCM adopts poison pill

January 30, 2015 10:19 AM

FXCM Inc., the currency brokerage that almost failed because of trading losses, adopted a stockholder- rights plan making it harder for anyone to take control of the company.

Each shareholder was given the right to buy a new class of stock if someone else accumulates more than 10% of the firm, New York-based FXCM said Friday in a filing. Holders of the new shares are entitled to 1,000 times the dividend on common stock, according to the filing. In the event of a merger, they could receive 1,000 times the purchase price, discouraging someone from trying to buy FXCM on the open market.

The plan is “designed to reduce the likelihood that any person or group would gain control of the company by open-market accumulation or other coercive takeover tactics without paying a control premium for all shares,” FXCM said. “The rights plan is not intended to deter offers that are fair and otherwise in the best interests of the company’s stockholders.”

FXCM, the largest U.S. retail foreign-exchange broker, lost more than $200 million after the Swiss central bank’s Jan. 15 decision to let the franc trade freely against the euro. A $300 million bailout from Leucadia National Corp., owner of investment bank Jefferies Group LLC, saved FXCM from violating capital requirements. The bailout lets Leucadia force a sale of the company and keep most of the proceeds for itself.

FXCM, which traded at $12.63 before the franc debacle, dropped to $2.24 yesterday. The shares traded at $2.32 at 8:31 a.m. in New York.

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