Breast imaging manufacturer Hologic adopted a poison pill plan after billionaire activist investor Carl Ichan, 77, announced that he had acquired a nearly 13% stake in the company.
The plan, which is activated when any one investor or entity acquires more than a 10% stake in the company, is designed to reduce "the likelihood that any person or group would gain control of Hologic through open market accumulation or other coercive tactics without appropriately compensating" shareholders, Hologic said in a statement. It makes it prohibitively expensive for Ichan, or anyone else, from acquiring it through stock purchases.
However, Vijay Kumar, an analyst with International Strategy & Investment Group in New York, told Bloomberg News that the move is unlikely to affect Ichan.
“I don’t even see what’s the point of having this now,” Kumar said in the Bloomberg News article. He also predicted that the Hologic management team would be replaced following a March 5 board meeting.
Hologic has long been dogged by investor unhappiness with management decisions, including acquisitions that may have been too costly and carrying too much debt.
While its revenue was up 24% to $2.49 billion for the 12 months ended Sept. 28 from a year earlier, and its diagnostics business, including its breast imaging technology, has performed well, it has not generated strong returns for its shareholders. Its stock plunged after the company announced on Nov. 11 that its fiscal fourth-quarter earnings would be significantly impacted by a $1.1 billion charge related to goodwill impairment and that 2014 would be another transition year for the company.
Hologic manufactures the Selenia Dimensions 3D Breast Tomosynthesis system, which has been growing in popularity despite the test not yet having a specific Medicare reimbursement code.
The company's stock rebounded significantly on news of the possible takeover attempt.