BIRMINGHAM STEEL CORPORATION DECLARES DIVIDEND DISTRIBUTION OF PREFERRED SHARE PURCHASE RIGHTS.BIRMINGHAM, Ala.--(BUSINESS WIRE)--Jan. 16, 1996--The Board of Directors of Birmingham Steel Corporation (NYSE NYSE See: New York Stock Exchange :BIR BIR British Institute of Radiology BIR Bureau of Internal Revenue BIR Bureau of International Recycling BIR Baculovirus IAP Repeat BIR Biomedical Imaging Resource BIR Bureau of Intelligence and Research (US State Department) ) today adopted a Share Purchase Rights Plan designed to discourage takeovers that involve abusive takeover tactics or do not provide fair value to shareholders. The plan is similar to plans previously adopted by many other publicly traded companies publicly traded company A company whose shares of common stock are held by the public and are available for purchase by investors. The shares of publicly traded firms are bought and sold on the organized exchanges or in the over-the-counter market. . The Board is not aware of any effort to acquire control of the Company. Robert A. Garvey, Chairman and Chief Executive Officer of Birmingham Steel, stated, "The Board of Directors determined that the Share Purchase Rights Plan is an effective and reasonable method to safeguard the interests of our shareholders. We are particularly concerned that the future benefits of the current capital development program could be denied to shareholders by an opportunistic opportunistic /op·por·tu·nis·tic/ (op?er-tldbomacn-is´tik) 1. denoting a microorganism which does not ordinarily cause disease but becomes pathogenic under certain circumstances. 2. , undervalued Undervalued A stock or other security that is trading below its true value. Notes: The difficulty is knowing what the "true" value actually is. Analysts will usually recommend an undervalued stock with a strong buy rating. acquisition of the Company. The plan is designed to assure that shareholders are not deprived of their rights to share in the full measure of the Company's long-term potential, while not preventing a fully valued Fully Valued A stock whose price analysts believe reflects the market's recognition of the company's underlying fundamental earnings power and therefore is unlikely to rise further in price. If the stock goes up from that price, it is called overvalued. bid for the Company." The Share Purchase Rights Plan provides for a dividend distribution of one Preferred Share Purchase Right for each outstanding share of Birmingham Steel common stock. The dividend distribution will be made to shareholders of record on January 19, 1996. Each shareholder is automatically entitled en·ti·tle tr.v. en·ti·tled, en·ti·tling, en·ti·tles 1. To give a name or title to. 2. To furnish with a right or claim to something: to the Rights and no physical distribution of new certificates will be made at this time. The Rights distribution is not taxable to shareholders. The Rights will be exercisable only if a person or group acquires 10% or more of Birmingham Steel's common stock or announces a tender offer which would result in ownership of 10% or more of the common stock. The Rights entitle the holder to purchase one one-hundredth of a share of a new series of preferred stock Stock shares that have preferential rights to dividends or to amounts distributable on liquidation, or to both, ahead of common shareholders. Preferred stock is given preference over common stock. Holders of preferred stock receive dividends at a fixed annual rate. at an exercise price of $74.00, and will expire on January 16, 2006. Following the acquisition of 10% or more of the Company's common stock by a person or group, the holders of the Rights will be entitled to purchase additional shares of Company common stock at one-half the then current market price, and, in the event of a subsequent merger or other acquisition of the Company, to buy shares of common stock of the acquiring entity at one-half of the market price of those shares. In neither event, however, would the acquiring person be entitled to purchase Birmingham Steel stock or its own shares at the reduced price. Existing holdings of 10% or more of the Company's common stock will not cause the Rights to be exercisable, or entitle the holders of Rights to purchase additional shares of the Company or any other entity, unless a current holder of 10% or more acquires additional Company common stock. Birmingham Steel will be able to redeem the Rights for $0.01 per Right at any time prior to ten days after a person or group acquires 10% or more of the Company's shares. A letter outlining the Share Purchase Rights Plan in more detail is being sent to the Company's shareholders. The Board of Directors also amended the Company's By-Laws to, among other things, eliminate a feature which permitted a minority of shareholders to force special meetings of shareholders and to add a requirement for advanced notice of nominations for Directors and matters to be considered at meetings of shareholders. Birmingham Steel Corporation operates steel mini-mills producing primarily steel reinforcing bar and merchant products, and also specializes in manufacturing high-quality rod and wire from semi-finished billets at its American Steel & Wire subsidiary. The common stock of Birmingham Steel Corporation is traded on the New York Stock Exchange New York Stock Exchange (NYSE) World's largest marketplace for securities. The exchange began as an informal meeting of 24 men in 1792 on what is now Wall Street in New York City. under the symbol "BIR." CONTACT: Birmingham Steel Corporation, Birmingham William R. Lucas William R. Lucas (born March 1, 1922) was the fourth Director of the NASA Marshall Space Flight Center. He served as director from June 15, 1974 to July 3, 1986; when he was forced to resign as a result of the Challenger tragedy. , Jr., 205/970-1231 |
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