Anchor Glass Container Corp. adopts Stockholder Rights Plan and files complaint against Owens Illinois

Anchor Glass Container Corporation, the third-largest manufacturer of glass containers in the US, recently announced that its board of directors has adopted a Stockholder Rights Plan. Under the Rights…

Anchor Glass Container Corporation, the third-largest manufacturer of glass containers in the US, recently announced that its board of directors has adopted a Stockholder Rights Plan. Under the Rights Plan, stock purchase rights will be distributed as a dividend to all stockholders at the rate of one Right for each share of Anchor Glass common stock held of record as of the close of business on 26 September 2001. The Rights Plan provides the board with more flexibility to maximize long-term stockholder value and is an important means of protecting Anchor Glass stockholders from actions taken by potential acquirers or stock accumulators claimed by the board not to be in the best interests of the company. The Rights Plan is designed to ensure that the board of directors will have the ability to negotiate the terms and conditions of acquisitions of substantial blocks of Anchor Glass stock by third parties. As previously announced, Consumers Packaging has obtained an Order of the Ontario Superior Court of Justice, under the Companies“ Creditors Arrangement Act, which authorized Consumers Packaging to develop a restructuring plan. As part of this restructuring plan, Consumers Packaging has entered into an agreement with Owens-Illinois, Inc. to purchase certain assets of Consumers Packaging, including the shares of its wholly-owned subsidiary Consumers US, Inc., which holds a majority equity interest in Anchor Glass. Owens-Illinois also has entered into a non-binding letter of intent to sell the shares of Consumers US to John J. Ghaznavi, the former chief executive officer and a current director of Anchor Glass. The acquisition of the shares of Consumers US (and the equity interest in Anchor Glass) by either Owens-Illinois or Ghaznavi would result in the Rights becoming exercisable. The acquisition of Consumers US (and the majority equity interest in Anchor Glass) by either Owens-Illinois or Ghaznavi could trigger certain “change of control” redemption provisions in Anchor“s public bond indentures. Anchor Glass is pursuing potential restructuring alternatives to reduce its outstanding indebtedness and is concerned that an acquisition by either Owens-Illinois or Ghaznavi of a majority interest in Anchor Glass may materially adversely affect its ability to effect such a restructuring. Under the Rights Plan, the board of directors of Anchor Glass could amend the Rights Plan to permit Owens-Illinois and/or Ghaznavi (or any other potential bidder) to acquire all or a portion of the Anchor Glass equity interests owned by Consumers US. Anchor Glass also reported that it has filed a complaint in the US Federal District Court in Tampa, Florida, against Owens-Illinois seeking an injunction against the same from acquiring the majority equity interest in Anchor from Consumers Packaging or statutory treble damages in lieu thereof. In its complaint, Anchor alleges that the proposed acquisition by Owens-Illinois would violate Federal and Florida antitrust laws as well as tortuously interfere with Anchor“s public bond indentures.