ATLANTA - With its stock near a 52-week low, EarthLink Incorporated said Tuesday it has adopted a ``poison-pill'' 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 eleven percent, to $5.24 in midday trading on the Nasdaq Stock Exchange. <br>
<br>
EarthLink shares are down more than 60 percent this year. Spokesman Dan Greenfield said, ``We definitely feel that we are undervalued.'' <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'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.
