American Axle approves new shareholder rights plan

American Axle board of directors approves amended shareholder rights plan

• On 9:56 am EDT, Friday October 30, 2009

DETROIT (AP) -- American Axle & Manufacturing Holdings Inc. said Friday its board of directors approved an amended shareholder rights plan that allows the auto parts supplier to preserve its ability to carry forward prior-year losses, a move than can help reduce a company's tax bill.

The plan is intended to deter the chance of a shareholder gaining a stake of 5 percent or more in the company and using its stock voting rights to reduce the value of the "net operating loss carryforwards" under a section of federal tax code.

The new plan lowers the beneficial ownership threshold to 5 percent of its common stock from 15 percent of its common stock. It also expands the definition of "acquiring person" to include pensions and certain other groups.

The plan will automatically expire on Sept. 15, 2013. Starting in 2011, the company's board of directors will review the new rights plan annually to ensure that it is still within the company's best interests.

Shares of American Axle rose 50 cents , or 7.4 percent, to $7.09 in morning trading. The stock has recovered from a low of 26 cents in March.