GCP answers investor maneuvers with stockholder rights plan

Sources: GCP Applied Technologies Inc., Cambridge, Mass.; CP staff

GCP directors have adopted a stockholder rights plan and declared a dividend distribution of one preferred share purchase right on each outstanding share of company common stock. The move responds to large blocks of shares changing hands in recent weeks, netting one New York hedge fund sponsor, 40 North Management LLC, a 24.6 percent ownership stake.

40 North has obtained clearance to acquire up to a 50 percent GCP position. It is affiliated with a New York holding company, Standard Industries, whose North American and overseas businesses include GAF, BMI Group, Siplast and SGI—each with a presence in asphalt, clay or concrete roofing systems and related raw materials.

“We adopted the rights plan to ensure all stockholders have the ability to realize the value of their investment and a voice in the future of GCP. The Board believes that it is in the best interests of all stockholders to guard against efforts to obtain control of GCP without paying all stockholders a control premium, especially as the Board continues the process of evaluating strategic alternatives,” says GCP Chairman Ronald Cambre.

Investors were informed late last month that the Board and management team are evaluating “all strategic, financial and operational alternatives, which may include the sale of GCP, a strategic business combination, continued execution of our business plan, or some combination of these, all with a view to maximizing value for our shareholders.”

The rights plan hinges on a future investor acquiring a 15 percent or greater ownership stake. Effective through March 2020, it provides time for informed decisions that are in the best interests of GCP and stockholders, the board contends, and does not deter directors from considering any offer that is fair and otherwise in stockholders’ best interests. GCP stock is up about 15 percent over the past month, hovering $30/share, and has traded at levels more than double its initial pricing in 2016, when the business was spun off from W.R. Grace & Co.