Placer Dome adopts shareholders rights plan

A “poison pill” shareholders’ rights plan has been adopted by the board of Placer Dome (TSE) to block possible hostile takeovers that do not treat all shareholders equally and fairly.

Fraser Fell, chairman of Placer Dome, stressed that the plan was not adopted in response to, or in anticipation of, any pending takeover bid. He also noted that the plan would not prevent a takeover of the international major mining company.

“The plan is intended to provide the board sufficient time to assess and evaluate any offer and, where appropriate, to explore and develop alternatives to maximize the value to shareholders,” he stated.

The plan contains a “permitted bid” concept intended to enable shareholders to approve and accept offers for control made to all shareholders for all shares, regardless of whether the offer has the board’s support.

Like a number of other companies that have adopted similar plans, Placer Dome was aware that differences between the securities laws of Canada a nd the U.S. could allow control of the company to be acquired without all shareholders being afforded the opportunity to participate.

Should a person or group acting in concert acquire 15% or more of the common shares of Placer Dome in a transaction not approved by the board, the rights plan would allow shareholders (other than the acquiring person or group) to purchase Placer Dome shares at a 50% discount to market price.

The threat of dilution in voting power and economic value to the acquiring party is intended to induce interested individuals to make a permitted bid to all shareholders, or to negotiate with the board.

The plan is now in effect, but it will require confirmation by shareholders not later than the company’s next annual meeting scheduled for May.