Gencorp, the Akron, Ohio, conglomerate facing a potentially hostile $2.2-billion takeover, Tuesday invoked a so-called "poison pill" defense, an apparent indication that it does not wish to be acquired by an outside investor group.
The defense allows the company to begin selling rights that allow shareholders to buy stock in a surviving company at half price. The rights, available only to shareholders who owned Gencorp stock as of Feb. 27, essentially dilute the holdings of any hostile raider, making it more difficult to acquire control of the company.
By announcing its intention to sell the rights, Gencorp essentially put General Partners, the investor group that has launched a bid to buy the company, on notice that it intends to fight the effort with its most potent ammunition.
Plans 'Vigorous' Pursuit
Late Tuesday the investment group said it intends to "pursue vigorously" its lawsuit against the rights sale. General Partners, composed of AFG Industries of Irvine and Wagner & Brown of Midland, Tex., is the same group that tried unsuccessfully last year to buy Lear Siegler Inc. of Santa Monica.
Wins Minor Victory
According to Gencorp's announcement, the rights will go on sale April 3, if the partnership increases its stake in the company to 20% or more by that date. So far, General Partners owns 9.8% of Gencorp. Gencorp said it would extend the sale date if the 20% level is not reached.
Earlier Tuesday, Gencorp gave the partnership a minor victory when it withdrew three other anti-takeover measures it had submitted to a shareholder vote scheduled for next week.
A. William Reynolds, Gencorp chairman and chief executive, said that the three proposals--an increase in the number of authorized shares, adoption of staggered terms for directors and the elimination of cumulative voting--were no longer significant.
In response to that move, General Partners said it had moved to cancel Friday's court hearing on its challenge to the three measures.