Allscripts Poison Pill Adds to Season of M&A Discontent
NEW YORK (TheStreet) -- Allscripts Healthcare Solutions (MDRX) is enacting a shareholder rights plan -- or "poison pill" -- to help it ward off an opportunistic takeover bid, even before an offer emerges.
The health care information company's shares plummeted nearly 40% in late April after weak earnings, disappointing guidance, the firing of its chairman and subsequent protest resignation of three board members.
It's not a surprise that the company is feeling vulnerable. The decision to enact a poison pill by Allscripts, though, also places the company in the camp of target market properties that are deciding to gut it out rather than sell out, after recent stock routs have some C-Suites scrambling to explore just about every alternative but a deal to revive battered shares.
Georgia Gulf (GGC) , Vulcan Materials (VMC) and Illumina(ILMN) have used poison pills to defend against what they said were low-priced takeover offers, and have had continued success in fending off hostile bidders.
The late April Allscripts share rout caused some to question, including shareholders of the company, whether a takeover bidder might try to swoop the company up at a discount. Last Friday, DealReporter wrote that the company could be a takeover target, causing shares to rise.
The enactment of the poison pill by Allscripts will make it uneconomic for any buyer to accumulate more than 10% of the company's shares.
Last Friday, a $35 a share bid for Georgia Gulf was withdrawn by Westlake Chemicals(WLK) , while a Delaware judge put an injunction on a hotly contested offer by Martin Marietta (MLM) for Vulcan Materials.