Stockholders Get Options on Discounted Shares : CPC Chiefs Adopt Anti-Takeover Plan

Community Psychiatric Centers directors adopted an anti-takeover plan Wednesday to thwart any unwelcome bids for the Laguna Hills-based chain of psychiatric hospitals.

The company’s management called the plan precautionary and said it was unaware of any efforts to acquire CPC.

“This is just a prudent means by which the board of directors can better (defend) the company against any possible future attempts,” said Richard Conte, CPC executive vice president.

Several stock analysts said they did not think the company was a merger candidate, and agreed that the anti-takeover plan was a precautionary move.

Nevertheless, CPC’s decision triggered unusually heavy trading of the company’s stock, which closed up 87.5 cents at $25.

Under the plan, each CPC stockholder will receive one option for every share of common stock. The options give holders the right to buy common stock at a 50% discount. However, they cannot be exercised until at least 20% of CPC is acquired by an outside party.

CPC has undergone a major expansion during the past 4 years, doubling its net income and revenue. For the year ended Nov. 30, the company earned $70.8 million on revenue of $356 million. The company has no long-term debt.

Although most analysts seemed to think otherwise, Todd Richter of the New York brokerage of Dean Witter Reynolds Inc. said CPC’s excess cash and lack of large loans could make it appealing to corporate raiders. “This company is generating loads of cash,” Richter said. “It’s very attractive.”