Johnson Controls Inc., which has been rumored as a takeover target of Mark IV Industries Inc. of Amherst, has strengthened its "poison pill" anti-takeover defense.
Meanwhile, a court ruling announced Wednesday also could make such a takeover more difficult for Mark IV to accomplish.
Johnson Controls, which is based in Milwaukee, announced Wednesday that its board of directors has voted to amend the company's shareholder rights plan, so that the shareholder rights will be exercisable when an investor acquires 10 percent of the company's stock.
The rights previously had been exercisable when an investor acquired 20 percent of the stock.
The shareholder rights entitle shareholders to purchase stock in Johnson Controls at a discount price in the event of a hostile takeover attempt. By increasing the amount of stock that is publicly traded, such "poison pill" plans attempt to make it more difficult for a takeover to be completed.
If Mark IV were to pursue Johnson Controls, it would have to deal not only with the poison pill, but also a Wisconsin anti-takeover law that has been upheld in court.
Attorneys were notified Wednesday that the law, which prevents successful bidders from swiftly selling newly acquired assets, was upheld by the 7th Circuit Court of Appeals in Chicago.
The law had been challenged by High Voltage Engineering Corp., a company owned by New York investors who began a campaign last year to buy a controlling share of Universal Foods Corp. stock.
In a 21-page decision, Judge Frank H. Easterbrook said "Wisconsin's law may well be folly; we are confident that it is constitutional."
Mark IV, which has built its annual sales to $1.2 billion in recent years largely through acquisition, has declined to comment on Johnson Controls.