Saks board gets rid of poison pill, changes bylaws

AP News
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Posted: Dec 14, 2009 5:44 PM

Luxury retailer Saks Inc. said Monday its board moved up the expiration of a "poison pill" to Dec. 14, getting rid of a defensive measure it took last year against Mexican billionaire mogul Carlos Slim.

In November 2008, Saks introduced a "poison pill" into its share structure, which is generally done to avert hostile takeovers, after Slim had increased his stake in the retailer.

With a poison pill, often formally called a shareholder rights plan, companies typically give shareholders the rights to buy new shares that will dilute the value of existing stock to thwart potential acquirers.

CEO Steve Sadove said the poison pill has served its purpose and was no longer necessary. With a new credit agreement adopted last month, Saks increased its change-of-control threshold to 40 percent from 20 percent, Sadove said in a statement.

Saks said its board also changed its bylaws to add new rules about how shareholders can nominate new board members or propose new business at meetings.

Saks operates Saks Fifth Avenue and Saks OFF 5th stores.

Its shares rose 24 cents, or 3.8 percent, to $6.51 on Monday.