A shareholder rights plan, sometimes known as a "poison pill," was
adopted Thursday by the ONEOK Inc. board of directors to "protect
shareholders" from a takeover attempt at an "inadequate price," the
Tulsa company said.
In addition, the company's board voted during a meeting in
Oklahoma City to omit payment of the next dividend on the company's
common stock. That action was taken to conserve cash and because of
a recent adverse ruling of the Oklahoma Supreme Court in a
take-or-pay lawsuit, ONEOK said.
On March 3, the Oklahoma Supreme Court denied a request to
reinstate ONEOK defenses for a jury trial in a natural gas contract
lawsuit pending in Caddo County District Court. The case, in which
ONEOK has said its ultimate liability could total $102.3 million,
was filed by Forest Oil Corp. of Denver.
"The adoption of the shareholder rights plan," said J.D. Scott,
chairman and chief executive officer, is a prudent action -
especially in light of the present turmoil in the financial markets
and the company's current circumstances - that ensures appropriate
protection of shareholder rights."
However, no discussions have been held with anyone interested in
acquiring ONEOK, said Scott, "nor is there anyone seeking control of
us as far as we know."
Here are the provisions of the shareholder rights plan as
described by ONEOK:
- It "provides for the distribution of one preference stock
purchase right as a dividend for each outstanding share of common
stock. Each right entitles shareholders to buy one one-hundredth of
a share of a new series of preference stock for $50.
- "Each one one-hundredth of a share of preference stock is
intended to be the economic equivalent of one share of common stock.
- "The rights may be exercised only if a person or group
acquires 20 percent or more of ONEOK common stock or announces a
tender offer that would result in ownership of 20 percent or more of
- "ONEOK may redeem the rights at 1 cent each at any time
before a buyer acquires 20 percent of the company's stock and
thereafter under certain circumstances, including in connection with
a `white knight' transaction, or if the buyer's ownership is reduced
to less than 20 percent."
ONEOK's stock closed at 10 1/8, down 1 1/2, Thursday on the New
York Stock Exchange. The stock stood at 30 on Oct. 18 and fell 5
points to 25 in the Black Monday crash on Oct. 19. On March 4, the
day the Oklahoma Supreme Court decided against ONEOK, the stock
closed at 17 3/4.
"The program would encourage a buyer to negotiate appropriately
with the board prior to attempting a takeover," said Scott. …