Amgen Spits Out Poison Pill

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Two months after shareholders called on Amgen Inc. to junk its so-called “poison pill” policy, the biotech giant’s board of directors on Tuesday voted to terminate the company’s stockholder rights plan at the end of the month.


The stockholder rights plan is designed to discourage hostile takeovers by making it more difficult for an entity to acquire large blocks of stock. Thousand Oaks-based Amgen’s plan had been scheduled to expire on December 12, 2010.

William Steiner of Wellington, Fla. who owns 1,200 shares of Amgen common stock, submitted a proposal at the company’s May 10 annual meeting calling on the board to terminate its stockholder rights plan. It’s a reform long advocated by corporate governance activists, who argue that poison pills favor management interests more than shareholders.


Amgen directors at the time recommended shareholders reject the proposal, arguing that rights plans give management more leverage in negotiating with potential buyers a better deal for other shareholders.


Amgen spokesman David Page said the board’s turnaround this week was not in direct response to the vote at the annual meeting, but was among several factors that were considered.


The board also established a policy saying that it would seek and obtain stockholder approval before adopting any future stockholder rights plan, but left open the potential for the board to move quickly to adopt a plan if necessary and then later submit it for shareholder ratification.

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