WWD.com/beauty-industry-news/financial/tiffany-co-stirs-talk-by-ending-poison-pill-548832/
government-trade
government-trade

Tiffany & Co. Stirs Talk By Ending Poison Pill

Tiffany said on Friday its board amended the poison pill to allow the plan to expire at the close of business on Thursday, instead of Sept. 17, 2008.

NEW YORK — Tiffany & Co.’s decision to end its stockholder rights plan — the so-called poison pill companies typically use to prevent a takeover from an unwanted suitor — led to speculation the luxury jeweler and specialty retailer might be for sale.

Tiffany said on Friday its board amended the poison pill to allow the plan to expire at the close of business on Thursday, instead of Sept. 17, 2008.

The decision “was not taken with reference to any proposed or expected acquisition transaction,” Michael Kowalski, chairman and chief executive officer, said in a statement. He specified that the board acted with an “eye to evolving principles of corporate governance and stockholder relations.”

Tiffany said that the board also approved a policy that would “generally require” it to submit the adoption or extension of any future stockholder rights plan to shareholders for a vote. The retailer added that the board “reserved to itself the option of adopting a poison pill without a stockholder vote if exigent circumstances and the exercise of its fiduciary responsibilities so warrant.”

An institutional investor, who asked not to be identified because of his fund’s rules, said: “Companies would never proactively [remove] a poison pill unless they want to put themselves on the market. They would never do that other than to make themselves more attractive.”

Tiffany previously has been the subject of merger speculation. Last year shares of the luxury retailer saw increased activity in March and again in June, both times because of market speculation that it might be acquired. American firm Coach Inc. and Swiss company Richemont AG, which owns luxury goods brands such as Cartier, were names that were linked to Tiffany.

In December, Tiffany reported a 37 percent jump in third-quarter net profits because of higher gross margins and a jump in consolidated same-store sales.

This story first appeared in the January 23, 2006 issue of WWD.  Subscribe Today.