Lear Siegler, the Santa Monica conglomerate that is fighting a $1.5-billion takeover bid by AFG Partners, has reinstated a "poison pill" anti-takeover measure.
The company said its board of directors agreed to reinstate a shareholder rights plan that it had canceled in order to merge with Wickes Cos. But last Tuesday, Wickes abandoned its $1.7-billion merger agreement with Lear Siegler because it had trouble obtaining financing.
The Lear Siegler board took the action Friday in a telephone vote. The poison pill strategy is intended to discourage unfriendly takeovers by making the company much more expensive to acquire.
Lear Siegler said the poison pill would give its shareholders the right to purchase common stock of either Lear Siegler or of any firm that acquires it at half the market price. The plan would also create a new class of preferred stock valued at $15,500 a share and entitle shareholders to buy 1/100 of a preferred share for $155.
The rights may be exercised only when an acquiring company accumulates 20% or more of Lear Siegler's shares or when it makes an offer to acquire 30% or more of the shares, the company said.
The measure was adopted in April but, in effect, was voided when the company agreed to merge with Wickes on Nov. 11, Lear Siegler spokesman Jack E. Cressman said.
"Now that we are not in that stance, we put the (shareholder rights) plan in place as it was before," he added.
A spokesman for AFG Partners said the partnership had no comment. AFG Partners, formed by Irvine glass manufacturer AFG Industries and Wagner & Brown, a Midland, Tex., oil and gas partnership, has offered to buy Lear Siegler for $85 a share.