Sturm, Ruger & Co. says it has adopted a one-year shareholder rights plan after an Italian gunmaker disclosed that it had built nearly a 9% ownership stake in the company.
Already a Subscriber? Log in
Get Instant Access to This Article
Subscribe to Hartford Business Journal and get immediate access to all of our subscriber-only content and much more.
- Critical Hartford and Connecticut business news updated daily.
- Immediate access to all subscriber-only content on our website.
- Bi-weekly print or digital editions of our award-winning publication.
- Special bonus issues like the Hartford Book of Lists.
- Exclusive ticket prize draws for our in-person events.
Click here to purchase a paywall bypass link for this article.
Connecticut firearms manufacturer Sturm, Ruger & Co. announced Tuesday it has adopted a one-year shareholder rights plan after an Italian gunmaker disclosed that it had built nearly a 9% ownership stake in the company.
Ruger said the plan, which took effect Oct. 14 and expires in October 2026, is intended to protect investors and give its board time to review Beretta Holding S.A.’s intentions.
A shareholder rights plan, often called a “poison pill,” is a tactic companies sometimes use to make hostile takeovers more difficult, according to the U.S. Securities and Exchange Commission. Such plans don’t block a potential acquisition outright but make it more costly and give company directors additional time to evaluate their options.
Beretta, a privately held firearms manufacturer of pistols and sporting shotguns, reported in late September and early October that it had acquired 7.7% and later 9% of Ruger’s outstanding shares. Ruger said it received no prior notice of those transactions and that Beretta declined to enter a standstill agreement or discuss its plans privately.
Under the rights agreement, each outstanding Ruger share now carries one right that becomes exercisable if any person or group acquires 10% or more of the company’s stock. If that happens, other shareholders — except the acquiring party — would be allowed to buy additional shares at a discounted price, reducing the acquirer’s ownership percentage.
Passive institutional investors are not subject to the threshold, according to the company.
"In light of the potential for Beretta to significantly increase its position in Ruger, the Board determined that adopting the Rights Plan is prudent to fulfill its fiduciary duties to all stockholders,” Ruger Board Chairman John Cosentino Jr. said in a statement. “Ruger looks forward to meeting with Beretta, a leader in the industry, and learning more about what operational and strategic collaborations they have in mind. We are open to any ideas for lasting value creation. Our Board and management team remain committed to providing quality and innovative firearms and delivering long-term value to our stockholders.
Ruger said it is being advised by investment firm RW Baird & Co. and law firm White & Case LLP.
The announcement comes as Ruger goes through a restructuring to improve its long-term financial performance. The company in January named a new CEO, Todd Syfert, who in June notified employees of a workforce reduction that is expected to generate $4 million in annual savings.
As of February, Ruger employed roughly 1,780 full-time workers, according to its annual report. The company is headquartered in Southport and has manufacturing operations in other states.