WHEELING, W.Va., Feb. 16 /PRNewswire-FirstCall/ -- Wheeling-Pittsburgh
Corporation (Nasdaq: WPSC) today announced that its Board of Directors has
adopted a shareholder rights plan that is primarily designed to protect the
Company's net operating loss carryforwards ("NOLs") for tax purposes. NOLs are
past losses that a corporation can use to reduce its current or future taxable
income. As of the beginning of 2004, the Company had NOLs of approximately
$285 million available to offset current and future taxable income.
The Company's ability to use the NOLs would be eliminated if the Company
experiences an "ownership change," as defined under Section 382 of the
Internal Revenue Code (the "Code") during a two-year period ending Aug. 1,
2005. Furthermore, the NOLs could be substantially limited if the ownership
change occurs during a rolling three-year period after Aug. 1, 2005. The
rights plan will expire on the earlier of the third anniversary date of the
plan, or the date, if any, on which the Company first discloses in any filing
with the Securities and Exchange Commission that the Company's net operating
loss carryforwards no longer exceed $50 million.
"After careful consideration, the Company's Board of Directors has
determined that it is in the best interests of the Company and all of its
stockholders to adopt the rights plan at this time," said James G. Bradley,
Chairman, Chief Executive Officer and President of the Company. "While the
rights plan has been designed to protect the NOLs to the extent possible, it
cannot ensure the protection of the NOLs. In light of our profitability in
2004, the NOLs have become an increasingly valuable asset to the Company and
its stockholders, and we hope that the rights plan will help safeguard the
availability of this asset to the Company."
The rights plan is designed to deter any person or group from becoming a
4.99 percent or greater beneficial owner of the Company's Common Stock. The
rights plan also discourages, with certain exceptions, existing 4.99 percent
or greater beneficial owners from acquiring any additional shares of Common
Stock. In general, under Section 382 of the Code, a company experiences an
"ownership change" if the 5 percent shareholders increase their aggregate
ownership interest in the company over a three-year testing period by more
than 50 percentage points.
The ownership interest is the percentage of stock owned over total stock
outstanding. Bradley indicated that the Company is concerned that future
acquisitions of Common Stock by an existing 5 percent stockholder or a new
5 percent stockholder could cause a technical "ownership change" and thereby
limit or completely eliminate the availability of the NOLs to the Company.
The terms of the rights plan permit the Board of Directors, in its discretion,
to determine that a particular person's beneficial ownership of 4.99% or more
of the Company's Common Stock will not jeopardize or endanger the Company's
NOLs, and to exempt such person's ownership of shares from triggering the
rights plan.
As part of the adoption of the rights plan, the Company's Board of
Directors declared a dividend of one right for each share of Common Stock held
of record as of the close of business on March 2, 2005, payable on March 2,
2005. The rights may cause substantial dilution to a person or group that
attempts to acquire 4.99 percent or greater of the Company's Common Stock on
terms not approved by the Board of Directors. Acquisitions of the Company's
Common Stock that would otherwise trigger the rights under the terms of the
plan are permitted where the entire Board of Directors has determined, prior
to consummation, that the transaction is fair to and in the best interests of
the Company's stockholders. In addition, the Board of Directors may redeem
the rights, in its discretion, at a redemption price of $.01 per right at any
time until the close of business on the 10th day following: (i) the first
date of any public announcement that a person has become an "acquiring person"
under the terms of the rights plan, or (ii) any earlier date on which the
Board of Directors becomes aware of the existence of an "acquiring person."
Additional information regarding the rights plan and the preferred share
purchase rights will be contained in a Current Report on Form 8-K and in a
Registration Statement on Form 8-A that the Company will be filing with the
Securities and Exchange Commission (the "SEC"). These filings will be
available on the SEC's web site at http://www.sec.gov and on the Company's web
site at http://www.wpsc.com under the "Investor Relations" tab. In addition,
the Company will mail, as soon as practicable, a "Summary of the Rights" to
its holders of record on March 2, 2005 which will describe the material terms
of the rights plan.
Wheeling-Pittsburgh Corporation, together with its primary subsidiary,
Wheeling-Pittsburgh Steel Corporation is a metal products company with 3,100
employees. Its facilities are in Steubenville, Mingo Junction, Yorkville, and
Martins Ferry, Ohio; Beech Bottom and Follansbee, West Virginia; and
Allenport, Pennsylvania.
Statements in this release that express a belief, expectation or
intention, as well as those which are not historical fact, are forward
looking. They involve a number of risks and uncertainties, which may cause
actual results to differ materially from such forward-looking statements. For
more information about these risks and uncertainties, please refer to
Wheeling-Pittsburgh Corporation's annual report on Form 10-K for the period
ended December 31, 2003, and other filings with the Securities and Exchange
Commission.
SOURCE Wheeling-Pittsburgh Corporation
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Related links:
http://www.wpsc.com
Company News On-Call:
http://www.prnewswire.com/comp/967451.html
CONTACT:
Jim Kosowski of Wheeling-Pittsburgh
Corporation, +1-304-234-2440
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