Oak Brook, Illinois-based A.M. Castle & Co., a global distributor of specialty metal and plastic products, announced Friday that its Board of Directors has adopted a shareholder rights plan and declared a dividend of one right for each outstanding share of its common stock.
A. M. Castle's Board of Directors has implemented the plan to reduce the likelihood that any person or group would gain control of the company by open market accumulation or other coercive takeover tactics without paying a control premium for all shares. Pursuant to the right plan, the company is issuing one preferred stock purchase right for each share of common stock outstanding at the close of business on September 11, 2012. Initially, these rights will not be exercisable and will trade with the shares of the Company's common stock.
Under the terms of the new plan, the rights will be exercisable if a person or group, without Board approval, acquires 10 percent or more of A. M. Castle's common stock (including in the form of synthetic ownership through derivative positions) or announces a tender offer that would result in the ownership of 10 percent or more of A. M. Castle's common stock. In these circumstances, each holder of a right (other than the acquiring person, whose rights will become void and will not be exercisable) will be entitled to purchase, at the then-current exercise price of the right, additional shares of A. M. Castle common stock having a value of twice the exercise price of the right.
The shareholder rights plan also grandfathers any person or group owning 10 percent or more of A. M. Castle's common stock immediately prior to the issuance of this press release.