Magazine article American Banker

St. Francis Capital of Wis. Adopts a Poison Pill Plan

Magazine article American Banker

St. Francis Capital of Wis. Adopts a Poison Pill Plan

Article excerpt

Milwaukee's largest publicly owned thrift company has adopted a shareholder rights plan that would make it easier to fend off unwelcome suitors.

St. Francis Capital Corp., the $1.6 billion-asset parent of St. Francis Bank, adopted a plan designed to dilute its stock should a hostile party begin accumulating shares.

St. Francis' board could carry out the poison pill plan if an unfriendly shareholder bought 15% of its common shares or if a smaller shareholder began acting aggressively.

Under the plan, shareholders of record Oct. 10 will be issued rights to buy shares of a new preferred stock should the board of directors put the plan into action. Each shareholder would get the right to buy 0.01 share of a new preferred stock for each share of common stock already owned.

Since the rights are to be issued only to Oct. 10 shareholders, newcomers would not have the right to buy the preferred shares. If the plan is invoked, the newer stockholders' position would be diluted and the threat of an unwanted takeover would be lessened, said Jon D. Sorenson, St. Francis' chief financial officer.

Mr. Sorenson stressed that St. Francis' board of directors did not adopt the shareholder rights plan in response to any current threat of a takeover. Rather, the plan is designed as a protective measure.

"It's there to make sure all shareholders are treated fairly," he said.

While no bank has ever exercised its poison pill, Mr. Sorenson said the Milwaukee business community recently watched from the sidelines as manufacturer Harnischfeger Industries attempted a hostile takeover of Fond du Lac-based Giddings & Lewis, another manufacturer. …

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