OKLAHOMA CITY -- Fleming Cos. here said last week its board would terminate the company's anti-takeover share-rights plan April 30 -- the day of the company's annual meeting and nine years ahead of schedule.
Fleming's board approved a share-rights plan last June that would have been in effect through July 2006. The early termination of that plan comes in response to pressure from shareholders, the company said.
Share-rights plans, also called "poison pills," are designed to render companies takeover-resistant by making unwanted or hostile takeovers difficult or prohibitively expensive.
The International Brotherhood of Teamsters -- one of Fleming's largest single shareholding entities -- successfully sued Fleming for the right to vote at the annual meeting on a proposal that would amend the company's bylaws to prohibit adoption of future share-rights plans without shareholder approval. The same proposal had also sought to remove the existing share-rights plan.
Although Fleming has appealed the ruling, the company does not expect a decision before its annual meeting.
In the proxy for the upcoming meeting, Fleming said the Teamsters' proposal is "overly broad" and its language "unclear." Fleming also said the Teamsters' proposal, should it pass, would leave Fleming vulnerable to a hostile takeover, since it would take too much time for shareholders to vote on a poison pill in the event of a takeover attempt.
Andy Oden, a company spokesman, told SN there has been no threat of a hostile takeover, and industry observers do not believe Fleming -- the second-largest food wholesaler with $16.5 billion in sales -- is a takeover risk.
