Arco Will Issue ‘Poison Pill’ Anti-Takeover Stock Rights
Atlantic Richfield said Tuesday that it has adopted “poison pill” anti-takeover measures but stressed that it doesn’t know of any effort to acquire the company.
The Los Angeles-based oil company said its board approved the issuance of common stock purchase rights to its shareholders similar to those issued in recent months by Mobil, Texaco and about 150 other companies to discourage unwanted takeover attempts.
Arco said the purchase rights set up a mechanism intended to assure “fair treatment” of the owners of Arco’s 180 million outstanding shares by enabling them to buy newly issued Arco shares for a specified price or, if the company is acquired, shares in the acquiring company for half price. Arco called it a disincentive to hostile suitors.
Chairman Lodwrick M. Cook told shareholders in a letter that the measures wouldn’t prevent a takeover but “should deter any attempt . . . on terms not approved by the board.”