Saks ends rights plan to prevent takeover

New York City Saks said late Monday that it was ending changes it made to its shareholders rights plan last year when it sought to prevent a potential hostile takeover by Mexican billionaire investor Carlos Slim Helu.

In a statement, Saks CEO Steve Sadove said those steps -- referred to in the finance community as a “poison pill”  -- were no longer necessary because of a change made last month to its revolving credit agreement, which raised a "change-of-control" threshold to 40% from 20%.

In November 2008, Saks introduced the changes to protect itself after Slim reported a stake in the company of 17.8%, making him the biggest investor.

At the time, the company said it would distribute one preferred share purchase right for each outstanding share of Saks common stock.

Saks had also said last year that if any individual or investor reached or surpassed a 20% stake, those rights would let shareholders buy shares at a 50% discount and give them ammunition to block an unwanted overture.

Saks said at the time that the action was intended to "impose a significant penalty upon any person or group" acquiring 20%.