Veradigm Extends Stockholder Rights Plan
Veradigm® (OTCMKTS: MDRX), a leading provider of healthcare data and technology solutions, has announced that its Board of Directors has approved an amendment to extend the company’s existing Stockholder Rights Plan. This extension moves the expiration date of the plan from February 26, 2025, to August 20, 2025. Additionally, the amendment adjusts the exercise price for the purchase of rights under the plan from $50.00 to $32.00 per share, reflecting the decline in the company’s common stock price since the initial adoption of the plan on February 26, 2024.
The decision to amend and extend the Rights Plan was based on a thorough evaluation by the Board, which concluded that many of the risks and conditions present when the plan was originally implemented still remain. These risks include issues arising from the ongoing audit of the company’s 2022 financial statements, the fact that Veradigm will not be current in its financial reporting for a significant period of time as a result of the audit and related restatement, and the challenge of tracking the accumulation of shares, especially since the company’s stock remains delisted.
The Board’s assessment has shown that these circumstances leave the company vulnerable to a potential, rapid accumulation of shares by an investor or group. This situation could result in an investor obtaining control of the company or accumulating a large position in Veradigm’s common stock without having to disclose their intentions or paying a premium to other stockholders. Such a scenario could undermine the interests of Veradigm’s existing stockholders, which is why the Board has taken proactive steps to protect them by extending the Rights Plan.
One of the primary reasons the Board believes this extension is necessary is that the price of Veradigm’s common stock has decreased significantly since the announcement of the termination of the exploration of strategic alternatives. The current market conditions, combined with the company’s delisted status and ongoing financial reporting challenges, make it difficult to track stock ownership effectively.
This opens the door to the possibility of an entity gaining control of the company through means such as open market purchases or derivative transactions without having to make a public disclosure of their intentions. In essence, this could lead to a “creeping” acquisition of control, which could harm the company’s long-term value and the interests of current stockholders.
The Rights Plan was initially put in place to ensure that all Veradigm stockholders have the opportunity to realize the full value of their investments. By extending the plan, the Board seeks to reduce the likelihood of any individual or group obtaining control of the company in a way that does not fairly compensate all stockholders.
The Rights Plan is designed to make it more difficult for a potential acquirer to gain control through means such as open market accumulation without offering appropriate compensation to existing stockholders. However, it is important to note that the Rights Plan does not prevent the company from pursuing any offers that are deemed to be in the best interests of its stockholders. If a potential acquirer comes forward with a fair offer, the Rights Plan would not block such an offer but would provide protection against acquisition attempts that could undermine stockholder value.
The Board’s decision to extend the Rights Plan also reflects the complexity and volatility of the company’s current situation. Given the ongoing audit and the required restatement of the 2022 financials, the company’s financial position remains uncertain for the time being. While Veradigm continues to work diligently to address these issues and restore the company’s financial reporting to full compliance, the extension of the Rights Plan is intended to ensure that stockholders are protected during this period of instability.
Additionally, the Rights Plan extension also includes an adjustment to the exercise price for the rights granted under the plan. The original exercise price was set at $50.00 per share, but due to the decline in the company’s stock price, this has been reduced to $32.00 per share. This adjustment aligns the exercise price with the current market price of Veradigm’s common stock and helps ensure that the Rights Plan remains effective in deterring hostile takeovers and other actions that could be detrimental to the interests of stockholders.
Veradigm’s stockholders should expect to find more detailed information regarding the amended Rights Plan in a Current Report on Form 8-K, which the company will file with the Securities and Exchange Commission (SEC). This filing will provide transparency into the changes made to the Rights Plan and offer additional context on the company’s rationale behind the amendment.
The company has also engaged legal counsel from Sidley Austin LLP to guide them through this process, and J.P. Morgan Securities LLC is serving as the financial advisor to Veradigm. These experts are assisting the company as it navigates the complexities of its current situation and ensures that stockholder interests are fully protected.
About Veradigm®
Veradigm is a healthcare technology company that provides a wide array of solutions designed to improve the efficiency, quality, and value of healthcare across various sectors. The company leverages its expertise in data, connectivity, platforms, and scale to deliver innovative healthcare technology solutions. Through the Veradigm Network, the company connects healthcare providers, payers, and biopharma markets, facilitating the flow of critical data and insights that drive better healthcare outcomes. By providing advanced data-driven solutions, Veradigm supports the optimization of healthcare operations and enhances decision-making for healthcare organizations, ultimately improving patient care.
Veradigm’s solutions are designed to address a variety of needs within the healthcare system, from improving clinical workflows to enabling more efficient administrative processes. Through its broad network, the company has established a dynamic community of solutions and partners who are committed to advancing the healthcare industry through technology and data-driven insights. Veradigm is dedicated to helping healthcare organizations stay at the forefront of technological advancements and ultimately achieve improved patient care and operational excellence.
The company’s mission to drive value through healthcare technology is underscored by its commitment to providing scalable, flexible solutions that can adapt to the evolving needs of the healthcare market. As a leader in healthcare technology, Veradigm continues to innovate, collaborate, and drive positive change across the healthcare landscape.
In summary, the extension of Veradigm’s Stockholder Rights Plan represents a strategic move by the company’s Board of Directors to protect stockholder interests amidst ongoing challenges. The amended Rights Plan aims to safeguard the company from hostile takeovers and creeping acquisitions, while allowing Veradigm to continue its pursuit of fair offers that align with the best interests of stockholders. The company’s continued focus on delivering data-driven healthcare solutions further supports its long-term growth prospects, even in the face of current challenges.
