This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Allscripts Poison Pill Adds to Season of M&A Discontent

NEW YORK ( TheStreet) -- Allscripts Healthcare Solutions (MDRX - Get Report) is enacting a shareholder rights plan -- or "poison pill" -- to help it ward off an opportunistic takeover bid, even before an offer emerges.

The health care information company's shares plummeted nearly 40% in late April after weak earnings, disappointing guidance, the firing of its chairman and subsequent protest resignation of three board members.

It's not a surprise that the company is feeling vulnerable. The decision to enact a poison pill by Allscripts, though, also places the company in the camp of target market properties that are deciding to gut it out rather than sell out, after recent stock routs have some C-Suites scrambling to explore just about every alternative but a deal to revive battered shares.

Georgia Gulf (GGC), Vulcan Materials (VMC - Get Report) and Illumina (ILMN) have used poison pills to defend against what they said were low-priced takeover offers, and have had continued success in fending off hostile bidders.

The late April Allscripts share rout caused some to question, including shareholders of the company, whether a takeover bidder might try to swoop the company up at a discount. Last Friday, DealReporter wrote that the company could be a takeover target, causing shares to rise.

The enactment of the poison pill by Allscripts will make it uneconomic for any buyer to accumulate more than 10% of the company's shares.

Last Friday, a $35 a share bid for Georgia Gulf was withdrawn by Westlake Chemicals (WLK), while a Delaware judge put an injunction on a hotly contested offer by Martin Marietta (MLM) for Vulcan Materials.

In Monday trading, Allscripts shares were off over 1% to $10.43, while Georgia Gulf shares were down nearly 10% to $30.80 and Vulcan Materials shares were lower by over 1.5% to $40.70.

Content on this page requires a newer version of Adobe Flash Player.

Get Adobe Flash player

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
SYM TRADE IT LAST %CHG
GGC $54.58 0.00%
CVI $40.16 0.00%
MDRX $11.99 0.00%
VMC $81.93 0.00%
AAPL $124.75 0.00%

Markets

DOW 17,826.30 -279.47 -1.54%
S&P 500 2,081.18 -23.81 -1.13%
NASDAQ 4,931.8150 -75.9760 -1.52%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs