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IHS adopts 'poison pill' defense Firm aims to discourage hostile takeovers


Its stock price sagging, Integrated Health Services Inc. announced yesterday it has adopted a stockholder rights plan -- a so-called poison pill -- to discourage hostile takeovers.

"We are not aware of any current or past attempt to acquire control of IHS," Chairman and Chief Executive Robert N. Elkins said. But the Owings Mills company might be an inviting target because "our reduced stock price . . . undervalues the company," said Marc B. Levin, senior vice president.

The stock closed yesterday at $28.25, down from its 52-week high of $42.

Integrated Health specializes in low-cost alternatives to hospitals. It provides an array of services, mainly in specially outfitted nursing homes. The company manages 38,000 employees in about 200 facilities nationwide.

"These things usually don't happen without any prompting," said analyst Robert M. Mains of First Albany Corp. "But I have not heard any rumors of a potential acquisition of the company.

"It is true that the stock is cheap currently, relative to what it has been in the past and relative to its potential earnings, and that makes a company appear relatively attractive."

Some investors fear the company could suffer from changes in federal Medicare and Medicaid reimbursements, which are a key source of revenue. But Mr. Mains said that, on the other hand, Integrated Health is well positioned to take advantage of the expected influx of Medicare beneficiaries into HMOs and other plans.

Integrated is attractive to managed-care insurers because the company keeps patient treatment costs down.

Under the plan announced yesterday, Integrated will distribute preferred stock purchase rights to its common stockholders as a dividend -- one right for each share of common stock held as of the end of business Oct. 11.

The rights can be exercised only if a person or group acquires 20 percent or more of Integrated's common stock or announces a tender offer that would result in that level of ownership.

Integrated Health officials, trying to portray the announcement as routine, said more than 1,650 companies have adopted similar plans since 1984.

The announcement follows by a week the layoffs of 50 to 100 people at the headquarters in Owings Mills. The company attributed them to restructuring.

Integrated Health has grown rapidly in its six years. It has rung up record earnings and revenues for 18 consecutive quarters.

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