Value Investing News - USG Stock Report - Comments

USG Rights Plan

JellyRollCapital — Fri, 11 Jan 2008 18:12:52 -0500

Guy,
I'm aware of the 15% trigger, but my understanding of the situation is that any buyout will have to be directly negotiated with USG's Board of Directors, who can choose to accept or reject the offer. If the acquiring company pursues a hostile takeover following a rejection, then the you have the Rights Plan taking effect.

Considering that Knauf has a joint venture with USG and is a long-term shareholder, I'm sure they are aware of this.
-James

USG

guywag — Fri, 11 Jan 2008 03:05:47 -0500

Hi James,

While I agree that Knauf's buying is intriguing, USG's new stockholders rights plan ('if any group acquires beneficial ownership of 15% or more, other shareholders will have the right to purchase additional shares at half the market price, therby diluting the triggering stockholder') would make it difficult for them to take over USG.