CINCINNATI -- Greeting-card manufacturer Gibson Greetings has adopted a poison-pill plan to prevent a hostile takeover.The reason, according to the local press, was a weak stock price and a major shareholder who has acquired more than a 6% stake in the company.
dopted as a sort of preventative measure. "The plan was not adopted because of any current effort to acquire Gibson," the company said in a statement.
The manufacturer's stock price has diminished to less than $4 a share from about $20 a year ago. And, according to a Securities and Exchange Commission filing, the major stakeholder checked the "... intent to influence management" box rather than the box that denotes "[for] investment purposes only" when completing the formality of stating the reason for buying.
Commenting on earnings, Gibson chairman and chief executive officer Frank O'Connell said, "Despite reductions in our fixed costs over the last year, our costs remain too high for existing sales levels."
For the second quarter of 1999, Gibson reported a net loss of $24.4 million, compared with net income of $5.6 million for the same period a year ago. For the first six months of 1999, Gibson reported a net loss of $27.8 million compared with a net loss of $3.3 million for the same period of 1998.
Gibson said it has put its Silly Slammers business on the selling block as a cost-cutting measure. It took second-quarter pretax charges of $22.3 million to write down Silly Slammers inventory and related assets. The charge also covers severance and other costs related to staff reductions.