OAK BROOK, Ill. (AP) -- A.M. Castle has adopted a shareholder rights plan to reduce the likelihood of an unwanted takeover at the metal and plastic products company.
Last week, shares surged after it was revealed that billionaire investor Tom Gores' private equity firm had acquired a 6.1 percent stake in A.M. Castle.
Platinum Equity said in a filing with the Securities and Exchange Commission that it made its investment in order to engage in talks with Oak Brook, Ill., company about a possible acquisition.
On Friday, A.M. Castle declared a dividend of one right for each outstanding share of its common stock.
Castle said that the plan should enable all shareholders to realize the long-term value of their investment by safeguarding the board's ability to take actions that will create value.
Under the terms of the plan, the rights will be exercisable if a person or group acquires 10 percent or more of the company's common stock without the board's approval or makes an offer that would result in that level of ownership.
Each holder of a right would then be entitled to purchase additional shares of stock.
The plan expires next Aug. 30.
Shares of A.M. Castle & Co., rose 29 cents, or 2.4 percent, to $12.21 in morning trading.
