USG amends shareholder plan to protect tax benefits

USG Corp., North America's largest maker of gypsum wallboard, amended its shareholder rights plan to protect tax benefits.

The amendment lowers the beneficial ownership threshold to 4.99 percent from 15 percent and is intended to protect the value of the company's net operating loss carry-forwards, the Chicago- based company said today in a statement. USG had $313 million in federal tax deferrals and $232 million in state deferrals, according to a regulatory filing for third-quarter results.

USG wants to protect its potential tax benefit deduction, determined as a percentage of its market capitalization, after the stock has dropped 78 percent this year. The temporary amendment reverts to the initial threshold of 15 percent after Sept. 30, 2009.

The move was an "economic driven decision, not a takeover defense," spokesman Robert Williams said in an interview.

The company's ability to use its net operating loss carry- forwards could be "substantially" reduced if USG experiences an "ownership change" as defined by the Internal Revenue Service.

USG has scaled back its production of construction materials since the U.S. housing market began declining in 2006. The shares fell 41 cents, or 5.1 percent, to $7.50 at 10:16 a.m. in New York Stock Exchange composite trading.