BKF Capital Group, Inc. (OTCQB – “BKFG”) today announced that it is terminating its offer to acquire up to 3,000,000 shares of Qualstar Corporation (NASDAQ — “QBAK”) because of the recently announced adoption by Qualstar of a shareholder rights plan. The adoption of the rights plan effectively makes it impossible to consummate the offer, since the acquisition of shares in the offer would trigger the exercisability of the rights under the plan.
As disclosed in its offering materials, BKF is currently Qualstar’s second largest shareholder. BKF commenced the offer to obtain a controlling influence over the company and to improve the prospects for the election of its candidates to the Qualstar board of directors at the company’s 2013 annual meeting of shareholders. BKF intends to pursue the election of its nominees at the 2013 annual meeting of shareholders, so that shareholders can choose whether they wish to replace the current board that continues to accumulate losses and that is foreclosing from shareholders the opportunity to decide for themselves whether to accept the BKF offer. Qualstar has never held its annual meeting later than the last week of March, and BKF expects that the board will convene the annual meeting this year no later than that.
BKF has today filed an amendment to its Form TO with the Securities and Exchange Commission to amend its offer by adding a condition that the rights plan be either waived, withdrawn or terminated, so as to allow the BKF offer to be consummated. But because it is apparent that the Qualstar board has no intention of doing so, BKF is also terminating the offer. BKF does not, however, concede that the rights plan was validly adopted under California law.
Responding to the board’s action to thwart BKF’s tender offer and shareholder choice, Steven Bronson, CEO and President of BKF made the following comments: