US Facilities Adopts Anti-Takeover Plan
US Facilities Corp. said Tuesday that it has adopted a stockholder rights plan designed to make a hostile takeover attempt of the company more difficult.
The Costa Mesa-based insurance company said the plan would be triggered in the event of an unfriendly party acquiring 15% or more of US Facilities common shares outstanding. Under the plan, shareholders would be allowed to purchase additional company stock at half price and, if a merger occurs, would be entitled to buy shares in the new firm at half price.
“We want to be sure, in the event someone has an interest in acquiring us, they come and talk first,” said US Facilities Chairman George Kadonada.
US Facilities is in the midst of a comeback. First-quarter results released earlier this month showed that the company’s earnings more than doubled to $814,000 from $401,000 in the corresponding period a year earlier. Revenue was up 25% to $17.6 million from $14.1 million.
The company’s stock, however, is still in the doldrums. US Facilities stock closed Tuesday at $4.25 per share, below its book value of about $6 per share.
Nobody has publicly stated an interest in US Facilities, company officials said. But analysts say the company is smart to take precautions.
“When a company’s stock sells well below book value and it’s liquid and whole, it’s open to offers both friendly and hostile,” said Herbert E. Goodfriend, a financial analyst with Prudential-Bache Securities in New York. “There is nothing in hand that says they should be concerned, but in this era everything is fair game.”