Investing.com — Fortrea (NASDAQ:FTRE) stock rose 5% in pre-open trading Thursday after the contract research organization announced it had adopted a limited-duration stockholder rights plan to protect shareholder interests.
The company said its board unanimously approved the plan, which will expire on June 10, 2026, unless terminated earlier. The rights plan was implemented in response to “significant and ongoing dislocation” in the company’s stock price and recent interest from third parties looking to capitalize on the situation.
While Fortrea did not specifically name any parties, activist hedge funds Starboard Value and Corvex Management have significant stakes in the company. Starboard owned 5,268,000 shares in the first quarter, while Corvex held 4,474,898 shares during the same period.
Under the rights plan, Fortrea will issue one right for each share of common stock as of June 23, 2025. These rights will become exercisable if any person or group acquires 10% or more of the company’s outstanding common stock. If triggered, all rights holders except the triggering party would be entitled to acquire shares at a 50% discount, or the company may exchange each right for one share of common stock.
The plan allows current shareholders who already own more than the triggering percentage to maintain their positions but prevents them from acquiring additional shares without triggering the rights plan.
Barclays (LON:BARC) is serving as strategic advisor to Fortrea, with Smith Anderson acting as legal advisor.
