EarthLink approves stock buyback, takeover defense plan

ATLANTA - With its stock near a 52-week low, EarthLink Inc. said Tuesday it has adopted a &#34;poison-pill&#34; defense plan to discourage hostile takeover bids. The Internet service provider also plans to spend as much as $25 million to repurchase company shares.<br> <br> EarthLink shares rose 52 cents, or 11 percent, to $5.24 in midday trading on the Nasdaq Stock Exchange.<br> <br> EarthLink shares are down more than 60 percent this year. &#34;We definitely feel that we are undervalued,&#34; EarthLink spokesman Dan Greenfield said.<br> <br> Last week, in a conference call with company executives, several analysts suggested that EarthLink would be wise to put some of its $556 million in cash into a repurchase program.<br> <br> Under the shareholder rights plan, EarthLink will issue a dividend of one right for each outstanding common share that was owned by the close of business Monday.<br> <br> Those rights become exercisable if a third party buys or makes an offer for 15 percent or more of EarthLink&#39;s common stock. At that point, EarthLink shareholders would be granted the right to buy shares of EarthLink common stock at 50 percent off current market price.<br> <br> Such a strategy dilutes the shares, making an acquisition extremely expensive.<br> <br> EarthLink said it was not aware of any attempts to acquire it.<br> <br>