Pacific Gulf Properties Swallows a ‘Poison Pill’

Pacific Gulf Properties Inc. said its board adopted a “poison pill” plan to guard against a possible hostile takeover of the western U.S. real estate developer.

“The plan is an attempt to provide the board of directors with adequate time and full opportunity to consider any and all alternatives to such hostile action,” said Glenn Carpenter, chairman and chief executive.

Poison pills, which usually are triggered after a hostile investor accumulates a certain percentage of stock, give existing shareholders the right to buy additional shares at a discounted price. The plan is designed to make it more expensive for the would-be buyer to take over the company because of the cost in buying the additional shares outstanding.

Carpenter said the poison pill wasn’t adopted in response to any takeover attempt of the Newport Beach-based company.

Under Pacific Gulf’s plan, shareholders will be issued one right for each share owned. Once an investor acquires 10% or more of its stock, shareholders will be able to exercise each right to buy additional shares. Shareholders of record Dec. 22 will get the rights.