Virginia First Financial Corp. has become the latest community bank to try to protect itself from unwanted suitors through a shareholders rights plan.
Last week, the company said, it adopted a preferred share purchase rights plan "designed to discourage takeovers that do not provide fair value to all stockholders."
The wording alludes to a practice by some hostile investors to acquire at a premium a block of stock in order to gain control of the company. The remaining shareholders get a lower price for their stock when the takeover is completed.
William A. Patton, chairman of Virginia First, said he was not aware of any attempt to gain control of the company.
Virginia First's plan mandates a dividend distribution of one right for each share of common stock held by shareholders of record as of April 26. The rights become exercisable once an unwanted acquirer obtains 10% or more of the bank's stock.