Netflix has adopted a stockholder rights plan aimed at preventing a hostile takeover of the company. The plan was announced just days after news emerged of Carl Icahn taking a stake in the company. The inveterate investor said he expects Netflix to be at the centre of consolidation in the online TV sector. Netflix is issuing rights to its shareholders to buy new stock in the company in the event of an unsolicited takeover. Initially, these rights will not be exercisable and will trade with the shares of Netflix's common stock. If the rights become exercisable, each right will entitle shareholders to buy one one-thousandth of a share of a new series of participating preferred stock at USD 350 per right. The rights will be exercisable only if a person or group acquires 10 percent (or 20 percent in the case of institutional investors) or more of Netflix's common stock in a transaction not approved by Netflix's board of directors. Netflix can redeem the rights at any time before the plan expires on 02 November 2015. Each common share will be entitled to one right.
