Manchester-based Lydall Inc. today said it has adopted a “poison pill” defense to protect shareholders in the event of an unsolicited offer for the global provider of heat and sound insulating materials and other services.
Lydall said its board of directors approved a shareholder rights plan in which the company will issue as a dividend one right for each outstanding common share as of the close of business on July 6.
The right to buy a predetermined quantity of Lydall stock is triggered if an undesired buyout offer emerges for the company within the next three years, the company said. Unless the board extends it, the rights plan expires on June 22, 2012.
Such plans, a fixture during the hostile takeover boom of the 1980s, are designed to protect all shareholders in the event a potential acquirer tries to seize control by buying a company’s shares on the open market.
Dale Barnhart, Lydall president and chief executive officer, said the protective measure is a response to the company’s low stock price, which at current trading levels values the company at around $57 million.
At mid-morning, Lydall was up 4 cents, or 1.2 percent, to $3.39 a share.
