ASCENA RETAIL GROUP ADOPTS TAX BENEFITS PRESERVATION PLAN

Rhea-AI Summary

ascena retail group (Nasdaq: ASNA) announced a tax benefits preservation plan to protect stockholder value. Effective June 5, 2020, the Company will issue a dividend of one right per common share. This plan aims to prevent an "ownership change" that could limit the use of net operating losses to offset future income. If an entity acquires 4.9% or more of outstanding stock, it triggers potential dilution. The plan remains effective until May 25, 2021, unless terminated earlier. More details will be available in an upcoming Form 8-K filing.

Positive

• The tax benefits preservation plan aims to protect stockholder value.
• The issuance of rights may deter substantial ownership changes that could limit tax benefits.

Negative

• The plan could discourage investment as potential acquirers may be deterred by the dilution risk.

MAHWAH, N.J., May 26, 2020 (GLOBE NEWSWIRE) -- ascena retail group, inc. (Nasdaq:ASNA) (“ascena” or the “Company”), today announced that its Board of Directors adopted a tax benefits preservation plan.

Under the tax benefits preservation plan, the Company will issue a dividend of one right for each share of its common stock held by stockholders of record as of the close of business on June 5, 2020.

The plan is designed to protect stockholder value by mitigating the likelihood of an “ownership change” that would result in significant limitations on the Company’s ability to use its net operating losses or other tax attributes to offset future income. The plan is similar to plans adopted by other public companies with significant net operating loss carryforwards. The tax benefits preservation plan provides, subject to certain exceptions, that if any person or group acquires 4.9% or more of the Company’s outstanding common stock, there would be a triggering event potentially resulting in significant dilution in the voting power and economic ownership of that person or group. Existing stockholders who hold 4.9% or more of the Company’s outstanding common stock as of the date of the plan will trigger a dilutive event only if they acquire an additional 1% of the outstanding shares of the Company’s common stock.   

The plan will continue in effect until May 25, 2021, unless earlier terminated or the rights are earlier exchanged or redeemed by the Board of Directors.

Additional information with respect to the tax benefits preservation plan will be contained in the Current Report on Form 8-K that the Company is filing with the Securities and Exchange Commission. A copy of the Form 8-K can be obtained at the SEC’s Internet website at www.sec.gov.     

Forward-Looking Statements

Certain statements made within this press release may constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially. Forward-looking statements are statements related to future, not past, events, and often contain words such as "expect," "anticipate," "intend," "plan," "believe," "seek," "see," "will," "would," "estimate," "forecast," "target," "preliminary," or "range". The Company does not undertake to publicly update or review its forward-looking statements even if experience or future changes make it clear that its projected results expressed or implied will not be achieved. Detailed information concerning a number of factors that could cause actual results to differ materially from the information contained herein is readily available in the Company’s most recent Annual Report on Form 10-K.

About ascena retail group, inc.

ascena retail group, Inc. (Nasdaq: ASNA) is a national specialty retailer offering apparel, shoes, and accessories for women under the Premium Fashion segment (Ann Taylor, LOFT, and Lou & Grey), Plus Fashion segment (Lane Bryant, Catherines and Cacique) and for tween girls under the Kids Fashion segment (Justice). ascena retail group, Inc. through its retail brands operates ecommerce websites and approximately 2,800 stores throughout the United States, Canada, and Puerto Rico.

For more information about ascena retail group, inc. visit: ascenaretail.com, AnnTaylor.com, factory.anntaylor.com, LOFT.com, outlet.loft.com, louandgrey.com, lanebryant.com, Catherines.com, and shopjustice.com. 

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CONTACT  For investors: ICR Inc. Jean Fontana Managing Director (646) 277-1214 Jean.Fontana@icrinc.com

For media: ascena retail group, inc. Shawn Buchanan Corporate Communications (212) 541-3418 Shawn_buchanan@ascenaretail.com

FAQ

What is the purpose of ascena retail group's tax benefits preservation plan?

The plan aims to protect stockholder value by preventing ownership changes that could limit the use of net operating losses.

When will ascena retail group issue the dividend related to the rights plan?

The dividend will be issued on June 5, 2020, to stockholders of record.

How long will the tax benefits preservation plan be in effect?

The plan will remain effective until May 25, 2021, unless terminated sooner.

What happens if someone acquires 4.9% of ascena retail group's stock?

Acquiring 4.9% or more will trigger a dilutive event affecting voting power and economic ownership.