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Spirit Airlines adopts ‘poison pill,’ to be exercisable if an investor acquires 10% of the shares outstanding

Spirit Airlines Inc. said Monday it hsa adopted a shareholder rights plan, also known as a “poison pill,” to help block any person or group of investors from taking advantage of the sharp drop in equity prices to take control of the discount airline. The air carrier said given the coronavirus pandemic’s impact on the airline industry, the stock has fallen 63% below the peak prior to the recent decline. The rights plan would become exercisable if a person or investor group acquired 10% or more of the shares outstanding. “The adoption of the Rights Agreement is intended to enable all Spirit stockholders to realize the full potential value of their investment in the company and to protect the interests of the company and its stockholders by reducing the likelihood that any person or group gains control of Spirit through open market accumulation or other tactics (especially in current volatile markets) without paying an appropriate control premium,” the company said in a statement. The stock, which was indicated down nearly 4% in the premarket, has lost 48% over the past month, while the S&P 500 has lost 14%.Market Pulse Stories are Rapid-fire, short news bursts on stocks and markets as they move. Visit MarketWatch.com for more information on this news.

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