Carter's Activates 'Poison Pill' Defense Against Hedge Fund's 17% Stake
Carter's, Inc., a leading children's apparel company, has implemented a shareholder rights plan, known as a 'poison pill', following a significant investment in its common stock by hedge fund Roseman Wagner Wealth Management. The move comes as Carter's is in the midst of a turnaround plan under new CEO Douglas Palladini, who joined the company a few months before May 2023.
The new shareholder rights plan, adopted by Carter's board of directors, is set to expire in about a year. Its purpose is to discourage any unwanted takeover attempts or to strengthen the company's negotiating position in case of a potential acquisition. This action follows Roseman Wagner's accumulation of nearly 17% of Carter's shares, making it the retailer's largest shareholder.
Carter's, which has not reported positive comparable sales since 2019 and has faced challenges since the pandemic, recently announced a turnaround plan. This includes cost-cutting measures such as closing around 100 stores as leases expire. Palladini, who took over as CEO and President, is leading these efforts.
Carter's has activated a shareholder rights plan in response to Roseman Wagner Wealth Management's significant investment. The company is currently working on a turnaround plan under Palladini's leadership. The 'poison pill' strategy is designed to protect Carter's and its shareholders from potential unwanted takeovers.
