Li-Cycle Implements Limited Duration Shareholder Rights Plan
Li-Cycle Holdings Corp., a global lithium-ion battery resource recovery company, has announced the adoption of a limited duration shareholder rights plan. The plan aims to protect the long-term interests of Li-Cycle and its shareholders, ensuring the full potential value of their investments. It is designed to prevent unequal treatment of shareholders and reduce the likelihood of any person or group gaining control of the company without appropriately compensating shareholders. The plan also allows the board sufficient time to make informed decisions in the best interests of Li-Cycle. The rights plan applies to all current and future shareholders of the company.
The rights plan operates similarly to plans adopted by other publicly listed companies in the United States. Each common share of Li-Cycle outstanding as of November 10, 2023, will receive one right. The rights become exercisable if a person or group acquires beneficial ownership of 20% or more of the company's outstanding common shares without board approval. In such a situation, holders of the rights (excluding the acquiring person or group) have the right to purchase additional common shares at a specified price. The rights plan has a 364-day term, expiring on October 30, 2024.
Li-Cycle has engaged legal counsel from McCarthy Tétrault LLP and Freshfields Bruckhaus Deringer US LLP. The company's goal is to create a domestic closed-loop battery supply chain for a clean energy future by recovering critical battery-grade materials through its innovative Spoke & Hub Technologies™.
Hot Take: The Impact of Li-Cycle's Limited Duration Shareholder Rights Plan on New Businesses
The recent move by Li-Cycle Holdings Corp. to implement a limited duration shareholder rights plan is a strategic maneuver that could significantly influence the trajectory of new businesses in the industry. This plan, designed to protect long-term shareholder interests and prevent unequal treatment, sets a precedent for how new businesses might structure their shareholder rights.
Setting a Precedent for Shareholder Protection
Li-Cycle's plan ensures that no individual or group can gain control of the company without adequately compensating shareholders. This approach could serve as a blueprint for new businesses looking to safeguard their shareholders' interests and maintain a balanced power distribution.
Implications for Control and Decision-Making
The plan also allows the board ample time to make informed decisions in the company's best interests. For new businesses, this highlights the importance of maintaining a level of control that allows for thoughtful, strategic decision-making.
Future-Proofing Shareholder Rights
The rights plan applies to both current and future shareholders, demonstrating a forward-thinking approach that new businesses could emulate. By considering future shareholders in their plans, new businesses can ensure their strategies are robust and adaptable to future growth and change.
In conclusion, Li-Cycle's limited duration shareholder rights plan offers valuable insights for new businesses. By prioritizing shareholder protection and maintaining control for informed decision-making, new businesses can create a solid foundation for long-term success.