The board of the Neuberger Berman Realty Income Fund (NRL) announced that they have declared a new rights agreement, aka poison pill, this one expiring on 12-05-2006. This time the trigger threshold has been raised to 18%, which appears to be an attempt to delay Phillip Goldstein from triggering the poison pill. Last month he sent a letter to the fund notifying them that his investor group had acquired 14.47% of the fund's outstanding shares, which was dangerously close to the previous trigger threshold of 15%.
I've written before that I think it is appropriate that the board try to defend the fund from the Horejsi Group's tender offer. But if they are allowed to use the poison pill, it sets a bad precedent for closed-end funds, and continually raising the threshold is not doing anyone any good. My suggestion to the board would be to drop the poison pill idea, and think of another way to ensure that all shareholders would be treated fairly if the Horejsi tender offer were to be successful.
NRL 1-yr chart:
DISCLOSURE: I own shares of NRL.