Pacific Telesis Adopts Poison Pill to Ward Off Hostile Bids

Directors of Pacific Telesis Group, the parent of Pacific Bell, adopted a “share-owners rights plan” on Friday designed to ward off hostile attempts to take control of the company.

The board also declared its anticipated third-quarter dividend of 47 cents a share, which will be paid Nov. 1 to owners of record as of Oct. 10. Dividend checks will be accompanied by a detailed description of the so-called poison-pill defense plan, said the company’s chairman and chief executive, Sam Ginn.

“It is not the intent of the plan to prevent an offer for Pacific Telesis that is well financed and in the interest of our shareholders,” Ginn said. “The plan is intended to prevent coercive takeover tactics and to encourage potential buyers to negotiate directly with the board of directors.”

The plan grants share-owners one “right” for each share of common stock that they hold as of Oct. 10. These rights will enable all share-owners, except a designated hostile bidder, to buy additional shares of stock at half the prevailing price. This will boost the cost of any takeover. The plan would be triggered if an unwanted bidder bought 20% or more of Pacific Telesis stock, or if directors designated as “adverse” any bidder owning at least a 10% stake.