Tempting Target Wonderware Has ‘Poison Pill’ Plan for Takeover Bid

IRVINE —  Wonderware Corp., its stock near an all-time low, has set up a “poison pill” plan designed to discourage a hostile takeover.

Lee Kim, Wonderware’s acting chief financial officer, said company officials don’t know of any takeover bid but believe the software company is an attractive target because of its relatively cheap stock price.

Wonderware shares closed Friday at $16, up 50 cents for the day, but down substantially from a high of nearly $42 last summer.

“It’s rather obvious that the current value of the stock makes the company a takeover target,” he said. “Consideration of this plan has been going on for about two months. It began in December, when the stock pretty much hit its low.”

The company’s stock began sliding in November when founder Dennis Morin retired as chairman and chief executive at age 49 to pursue outside interests that included gourmet cooking and working with other start-up companies.

On Dec. 20, less than a month after Morin’s announcement, the stock tumbled to a 18-month low of $13.563 when Wonderware’s chief financial officer resigned after being passed over for the top slot.

The anti-takeover plan gives stockholders the right to obtain additional shares of common stock for about 50% of market price if an unfriendly suitor acquires more than a 15% stake in the company or announces a takeover bid. Shareholders now own 13.2 million shares of Wonderware’s common stock.

By exercising the stock purchase rights, shareholders would receive enough new stock to more than double the cost of a takeover, Kim said.

“The intent is to have a mechanism in place that would allow the board [of directors] to force an unfriendly suitor to negotiate a deal rather than just squeezing everyone out by buying up control in the open market,” he said.