LONDON, Dec. 22, 2022 /PRNewswire/ -- ClarivatePlc
(NYSE: CLVT) today announced that its Board of Directors adopted a
tax benefits preservation plan (the "Tax Benefits Preservation
Plan") designed to protect the availability of Clarivate's U.S. net
operating loss carryforwards ("NOLs") and certain other U.S. tax
attributes, which can be utilized in certain circumstances to
offset future U.S. tax liabilities. As of September 30, 2022, Clarivate estimates that it
had U.S. federal net operating loss and interest carryforwards in
excess of $1.0 billion.
The Tax Benefits Preservation Plan will expire on October 31, 2023, unless terminated earlier in
accordance with its terms.
Clarivate's ability to use these NOLs and other tax attributes
would be substantially limited if it experienced an "ownership
change" within the meaning of Section 382 of the Internal Revenue
Code. In general, a company would undergo an ownership change if
its "5% shareholders" (determined under Section 382) increased
their ownership of such company's stock by more than 50 percentage
points over a rolling three-year period. The Tax Benefits
Preservation Plan is intended to reduce the likelihood of such an
ownership change at Clarivate by deterring any person or group that
would be treated as a 5% shareholder from acquiring beneficial
ownership of 4.9% or more of Clarivate's outstanding ordinary
shares or other acquisitions that cause a person to be the owner of
4.9% or more of Clarivate's stock for tax purposes, and
deterring existing shareholders who currently meet or exceed this
ownership threshold from acquiring additional Clarivate stock.
The Tax Benefits Preservation Plan is similar to those adopted
by other public companies with significant U.S. NOLs and other tax
attributes. The Tax Benefits Preservation Plan is not designed to
prevent any action that the Board determines to be in the best
interest of Clarivate and its shareholders, and it will help to
ensure that the Board of Directors remains in the best position to
discharge its fiduciary duties.
Pursuant to the Tax Benefits Preservation Plan, Clarivate will
issue, by means of a dividend, one preferred share purchase right
(the "Rights") for each outstanding Clarivate ordinary share held
by shareholders of record at the close of business on January 1, 2023. The distribution of the Rights
is not taxable to Clarivate's shareholders. Under the Tax Benefits
Preservation Plan, the Rights will initially trade with Clarivate's
ordinary shares and will generally become exercisable only if a
person or group that would be treated as a 5% shareholder acquires,
as measured for tax purposes, either (i) 4.9% or more of
Clarivate's outstanding ordinary shares or (ii) 4.9% or more (by
value) of the company's capital stock. Acquisitions of
Clarivate's outstanding 5.25% Series A mandatory convertible
preferred shares are taken into account for purposes of these
ownership thresholds, determined on an as-converted basis in
accordance with applicable U.S. securities laws or on the basis of
the value of such shares, as applicable. Existing shareholders who
currently meet or exceed this 4.9% ownership threshold will be
"grandfathered in" at their current ownership level but will
trigger the Tax Benefits Preservation Plan if they acquire any
additional stock from the date of this initial announcement.
Clarivate's Board of Directors has the discretion to exempt any
person or group from the provisions of the Tax Benefits
Preservation Plan.
If the Rights become exercisable, all holders of Rights, other
than the person or group triggering the Rights, will be entitled to
purchase for $42.00 (the "Purchase
Price") for each Right, a number of one-thousandths of a share of a
new series of participating cumulative preferred shares or
Clarivate's ordinary shares having an aggregate market value of
twice the Purchase Price. Rights held by the person or group
triggering the Rights will become void and will not be
exercisable.
Additional information about the Tax Benefits Preservation Plan
is available in the Form 8-K filed by Clarivate with the U.S.
Securities and Exchange Commission.
About Clarivate
Clarivate™ is a global leader in providing solutions to
accelerate the pace of innovation. Our bold mission is to help
customers solve some of the world's most complex problems by
providing actionable information and insights that reduce the time
from new ideas to life-changing inventions in the areas of Academia
& Government, Life Sciences & Healthcare, Professional
Services and Consumer Goods, Manufacturing & Technology. We
help customers discover, protect and commercialize their inventions
using our trusted subscription and technology-based solutions
coupled with deep domain expertise. For more information, please
visit clarivate.com.
Forward-Looking
Statements
This communication contains "forward-looking statements" as
defined in the Private Securities Litigation Reform Act of 1995.
These statements, which express management's current views
concerning future business, events, trends, contingencies,
financial performance, or financial condition, appear at various
places in this communication and may use words like "aim,"
"anticipate," "assume," "believe," "continue," "could," "estimate,"
"expect," "forecast," "future," "goal," "intend," "likely," "may,"
"might," "plan," "potential," "predict," "project," "see," "seek,"
"should," "strategy," "strive," "target," "will," and "would" and
similar expressions, and variations or negatives of these words.
Examples of forward-looking statements include, among others,
statements we make regarding: the availability of net operating
loss carryforwards and certain other U.S. tax attributes to offset
future U.S. tax liabilities; guidance outlook and predictions
relating to expected operating results, such as revenue growth and
earnings; strategic actions such as acquisitions, joint ventures,
and dispositions, including the anticipated benefits therefrom, and
our success in integrating acquired businesses; anticipated levels
of capital expenditures in future periods; our ability to
successfully realize cost savings initiatives and transition
services expenses; our belief that we have sufficient liquidity to
fund our ongoing business operations; expectations of the effect on
our financial condition of claims, litigation, environmental costs,
the impact of inflation, the impact of foreign currency
fluctuations, the COVID-19 pandemic and governmental responses
thereto, contingent liabilities, and governmental and regulatory
investigations and proceedings; and our strategy for customer
retention, growth, product development, market position, financial
results, and reserves. Forward-looking statements are neither
historical facts nor assurances of future performance. Instead,
they are based only on management's current beliefs, expectations,
and assumptions regarding the future of our business, future plans
and strategies, projections, anticipated events and trends, the
economy, and other future conditions. Because forward-looking
statements relate to the future, they are difficult to predict and
many of which are outside of our control. Important factors that
could cause our actual results and financial condition to differ
materially from those indicated in the forward-looking statements
include those factors discussed under the caption "Risk Factors" in
our annual report on Form 10-K, along with our other filings with
the U.S. Securities and Exchange Commission ("SEC"). However, those
factors should not be considered to be a complete statement of all
potential risks and uncertainties. Additional risks and
uncertainties not known to us or that we currently deem immaterial
may also impair our business operations. Forward-looking statements
are based only on information currently available to our management
and speak only as of the date of this communication. We do not
assume any obligation to publicly provide revisions or updates to
any forward-looking statements, whether as a result of new
information, future developments or otherwise, should circumstances
change, except as otherwise required by securities and other
applicable laws. Please consult our public filings with the SEC or
on our website at www.clarivate.com.
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