Real estate investment trust Global Net Lease (GNL) has approved a short-term stockholder rights plan (aka a ‘poison pill’) to protect the company from the actions of third parties that are not in GNL’s best interest.
“The Board has adopted the Plan at this time due to the substantial volatility in the trading of the Company’s common stock that has resulted from the ongoing COVID-19 pandemic” GNL stated in a press release.
Indeed, shares in GNL are currently trading down over 30% year-to-date- although the stock has bounced over 15% in the last five days alone (vs a 10% gain for the S&P 500).
Similar to plans adopted recently by other publicly held companies, GNL’s stockholder plan is designed to reduce the likelihood that a third party would gain control of GNL by imposing significant penalties upon any person or group that acquires 4.9% or more of the outstanding shares of the company without the board’s approval.
The plan, which expires on April 8, 2021, is not intended to prevent any action that the board determines to be in the company’s best interest and also exempts passive investors.
According to TipRanks, GNL has a Moderate Buy analyst consensus and a $21.50 average analyst price target (for upside of 56%). (See GNL’s stock analysis on TipRanks)
BTIG’s Michael Gorman recently initiated coverage on the stock with a buy rating, arguing that GNL should see above-average returns due to the “external growth, differentiated property exposure, and an improved balance sheet”.
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