A New York bank, concerned about the value of its stake in Community Psychiatric Centers, wants the company to dump a "poison pill" strategy that directors adopted five years ago to discourage unwanted takeover attempts.
Amalgamated Bank of New York, which owns 2,700 shares of the Laguna Hills-based operator of psychiatric hospitals, suggests that the amendment to the company's corporate charter was adopted without shareholder approval.
The provision, called a shareholders rights plan, states that the company has the right to acquire two shares of the company stock for the price of one whenever an unfriendly takeover is attempted.
The bank also argues in documents sent to shareholders that poison pill strategies generally have proved to have a "negative effect" on the value of stock. Besides, the bank asserts, the "company's performance is unsatisfactory." It asks shareholders to vote for its proposal to scuttle Community Psychiatric's poison pill provision.
In the same documents, Community Psychiatric urges shareholders to vote down the bank's proposal at the company's annual meeting, scheduled for May 19.
"The board strongly believes that the plan is in the best interests of shareholders," the company states. A spokeswoman for Community Psychiatric declined to expand on the published statements.