On April 23, 2020, the Board of Directors of Chesapeake Energy Corporation (the “Company”) declared a dividend of one preferred share purchase right (a “Right”), payable on May 4, 2020, for each share of common stock, par value $0.01 per share, of the Company outstanding on May 4, 2020 (the “Record Date”) to the stockholders of record on that date. In connection with the distribution of the Rights, the Company entered into a Section 382 Rights Agreement (the “Rights Agreement”), dated as of April 23, 2020, between the Company and Computershare Trust Company, N.A., as rights agent.
Each Right entitles the registered holder to purchase from the Company one one-thousandth of a share of Series B Preferred Stock, par value $0.01 per share, of the Company (the “Preferred Shares”) at a price of $90.00 per one one-thousandth of a Preferred Share represented by a Right, subject to adjustment.
The Rights are in all respects subject to and governed by the provisions of the Rights Agreement, which is incorporated herein by reference. The description of the Rights is incorporated herein by reference to the description set forth under Items 1.01 and 5.03 of the Company’s Current Report on Form 8-K filed on April 23, 2020 and is qualified in its entirety by reference to the full text of the Rights Agreement.
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And common stockholders get diluted to death
It means that the company is issuing several billion in equity (4.5, I believe). They will take those proceeds to pay down debt, which will make the company look substantially more attractive as a buyout target. So they also adopted the poison pill provision that would cause a buyer to lose six billion in carried tax losses that can be used to offset future revenue. Because of this, the company is still unattractive to a buyer due to the poison pill, and in a much better position from a debt to asset ratio, and is much less likely to BK in the near future.
You are asking these id–ts?