A. M. Castle & Co.'s board of directors have adopted a shareholders rights plan for shareholders to fend off a potential hostile takeover bid.
The company said the shareholder "Rights Plan" will provide limits on groups that acquires more than 10 percent of A.M. Castle common stock without approval from the board. The company's board said in a statement it believes that the plan will enable all shareholders to realize the long-term value of their investment by safeguarding the Board's ability to continue to evaluate and take actions that will create value for shareholders.
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The action comes after investment company Platinum Equity LLC, led by billionaire Tom Gores, bought a 6 percent stake of A.M. Castle through its metal distributor Ryerson Inc., the Reuters news agency reported. Gores at the time hinted at a possible acquisition of the Oak Brook-based company, Reuters reported.
The rights plan grandfathers shareholders Simpson Holders, but limited them to a 28 percent stake. Other shareholders with more than 10 percent of company stock are also grandfathered into the plan, but are limited to a .5 percent increase in holdings.
The rights plan will expire on Aug. 30, 2013.
A. M. Castle was founded in 1890 and is a global distributor of specialty metal and plastic products.