LAKE FOREST, Ill., April 16, 2020 /PRNewswire/ -- Tenneco Inc.
("Tenneco") (NYSE: TEN) announced today that its Board of Directors
(the "Board") adopted a shareholder rights plan designed to protect
the availability of the Company's tax assets (the "Plan") and
preserve long-term value for the benefit of all of Tenneco's
shareholders.
As of December 31, 2019, Tenneco
had approximately $155 million of
usable tax credits that could be available to offset future tax
payments dollar-for-dollar. Tenneco's ability to use these tax
assets would be substantially limited if it experienced an
"ownership change" within the meaning of Section 382 of the
Internal Revenue Code ("Section 382").
In general, a company would undergo an ownership change if its
"5-percent shareholders" (determined under Section 382) increased
their collective ownership of such company's stock by more than 50
percentage points over a rolling three-year period. The Plan is
intended to reduce the likelihood of such an ownership change by
deterring any person or group from acquiring beneficial ownership
of 4.9% or more of Tenneco's outstanding Class A Voting Common
Stock (the "Class A Shares").
Under the Plan, the rights will initially trade with Tenneco's
Class A Shares and Class B Non-Voting Common Stock and will
generally become exercisable only if a person (or any persons
acting as a group) acquires 4.9% or more of the outstanding Class A
Shares. If the rights become exercisable, all holders of rights
(other than any triggering person) will be entitled to acquire
shares of common stock at a 50% discount or Tenneco may exchange
each right held by such holders for one share of common stock. Any
person which currently owns 4.9% or more of the Class A Shares may
continue to own their shares but may not acquire any additional
shares without triggering the Plan. The Board has the discretion to
exempt any person or group from the provisions of the Plan.
Tenneco intends to submit the Plan to a vote of its shareholders
at its 2021 annual meeting. The Plan will expire on the day
following the certification of the voting results for the 2021
annual meeting, unless Tenneco's shareholders ratify the Plan, in
which case it will continue in effect until October 2, 2021, the date on which the impact of
certain transactions pursuant to the Company's completion of its
acquisition of Federal-Mogul will no longer be taken into account
under relevant tax rules.
Additional information about the Plan will be available on a
Form 8-K to be filed by Tenneco with the U.S. Securities and
Exchange Commission.
1 As defined by the Internal Revenue Code.
About Tenneco
Headquartered in Lake Forest, Illinois, Tenneco is one of the
world's leading designers, manufacturers and marketers of
Aftermarket, Ride Performance, Clean Air and Powertrain products
and technology solutions for diversified markets, including light
vehicle, commercial truck, off-highway, industrial and the
aftermarket, with 2019 revenues of $17.45
billion and approximately 78,000 employees worldwide. On
October 1, 2018, Tenneco completed
the acquisition of Federal-Mogul, a leading global supplier to
original equipment manufacturers and the aftermarket. In the
future, the Company expects to separate its divisions to form two
new, independent companies: DRiV, an Aftermarket and Ride
Performance company, and New Tenneco, a Powertrain Technology
company.
Safe Harbor
This release contains forward-looking
statements. These forward-looking statements include, among others,
statements relating to all the operation or effects of the Plan,
the use of tax assets to offset future taxable income and our plans
to separate into two independent companies. Statements preceded by,
followed by or that otherwise include the words "will," "should,"
and "could" or similar words or expressions are generally
forward-looking in nature and not historical facts. Forward-looking
statements are subject to a number of risks and uncertainties that
could cause actual results to materially differ from those
described in the forward-looking statements, including the course
of the COVID-19 pandemic and its impact on general economic,
business and market conditions, our ability (or inability) to
execute on our plans to respond to the COVID-19 pandemic and our
previously announced Accelerate plan and to realize the anticipated
benefits of these actions, our financial flexibility in addressing
the impact of the COVID-19 pandemic, the possibility that Tenneco
may not complete the separation of the Aftermarket & Ride
Performance business from the Powertrain Technology business (or
achieve some or all of the anticipated benefits of such a
separation); the possibility that the separation may have an
adverse impact on existing arrangements with Tenneco, including
those related to transition, manufacturing and supply services and
tax matters; the ability to retain and hire key personnel and
maintain relationships with customers, suppliers or other business
partners; the risk that the benefits of the separation may not be
fully realized or may take longer to realize than expected; the
risk that the separation may not advance Tenneco's business
strategy; the potential diversion of Tenneco management's attention
resulting from the separation; as well as the risk factors and
cautionary statements included in Tenneco's periodic and current
reports (Forms 10-K, 10-Q and 8-K) filed from time to time with the
SEC.
Given these risks and uncertainties, investors should not place
undue reliance on forward-looking statements as a prediction of
actual results. Unless otherwise indicated, the forward-looking
statements in this release are made as of the date of this
communication, and, except as required by law, Tenneco does not
undertake any obligation, and disclaims any obligation, to publicly
disclose revisions or updates to any forward-looking statements.
Additional information regarding these risk factors and
uncertainties is detailed from time to time in the company's SEC
filings, including but not limited to its annual report on Form
10-K for the year ended December 31,
2019.
Investor Inquiries
Linae Golla
(847) 482-5162
lgolla@tenneco.com
Rich Kwas
(248) 849-1340
rich.kwas@tenneco.com
Media Inquiries
Bill Dawson
(847) 482-5807
bdawson@tenneco.com
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SOURCE Tenneco Inc.