HomeBase Updates Poison Pill

HomeBase Inc. said its board adopted a new “shareholder rights” plan to replace a similar one that expired Monday. The plan, known as a poison pill, is designed to ward off takeover bids deemed unfair to the company’s shareholders.

Under the new plan, directors of the Irvine-based home-improvement chain have 10 days after an investor accumulates more than 15% of HomeBase’s shares to decide whether the move constitutes a takeover attempt and whether to trigger the poison pill plan.

If triggered, the plan allows the company’s shareholders--but not the new investor--to buy HomeBase shares at discounted prices, thereby diluting the value of the 15% stake. The board also has the option of distributing free shares to stockholders.

The company’s new plan gives directors more time to analyze any offer before deciding whether to trigger the plan, said Bill Langsdorf, HomeBase’s chief financial officer.