Irving, Texas-based Commercial Metals Company announced Monday that its Board of Directors adopted a Stockholder Rights Plan in reaction to a billionaire investor's "sudden and rapid ownership increase."
The plan, which will implement a 10 percent threshold for investors (although stockholders with existing positions over 10 percent will be grandfathered in), is intended to "enable all stockholders to realize the long-term value of their investment in the company and protect them from unfair or coercive takeover attempts."
Additionally, the plan will provide the board with "sufficient time to consider any and all alternatives to such an action and does not prevent the Board from considering or accepting an offer, if the Board believes such action is fair, advisable and in the best interests of its stockholders."
In a statement, the CMC Board of Directors claimed to adopt the plan as a direct response to billionaire Carl Ichan's "sudden and rapid ownership increase in CMC, his aggressive use of derivatives which obscures the rate of his increase, and a call to the company from one of Icahn's representatives who indicated Ichan's intention to continue accumulating CMC stock."
Ichan is no stranger to stockholder animosity, which has spread across a wide spectrum of industries over the years, including most recently: Forest Laboratories, a Boston-based pharmaceutical manufacturer, announced Monday that it is fighting to prevent the "activist investor" from winning seats on its board; since mid-July of this year, Ichan has twice offered to buy Clorox and has been twice rejected for credibility issues; he failed to take control of film distributor Lions Gate in 2010; and several other instances of rapid stock sweeps and takeover attempts.