Amwest Insurance Group OKs Anti-Takeover Plan

Amwest Insurance Group, an insurance holding company in Woodland Hills, adopted a “poison-pill” stockholder rights plan designed to fend off unwelcome takeover bids.

Under the plan, if any suitor--with the exception of Amwest Chairman Richard H. Savage or his affiliates--acquires 20% or more of Amwest’s common stock, the rights would enable stockholders to buy Amwest shares for half price. The suitor who bought the 20% stake would not be able to exercise the same rights, however.

The idea is to sharply increase the number of shares in other stockholders’ hands, making it prohibitively expensive for an unwanted bidder to pursue a hostile offer. Similar plans have been adopted by hundreds of other companies.

The rights will be distributed to stockholders of record May 22, and stockholders are entitled to one right for each common share that they own. Amwest said it is not aware of any takeover interest in the company.

Separately, Amwest said, it plans to buy up to $1 million of its common stock in periodic open-market purchases. Amwest’s stock closed Monday at $11.00 on the American Stock Exchange. At that price, the buyback would involve about 91,000 shares, or 4% of Amwest’s 2.49 million total shares outstanding.

Amwest specializes in underwriting bail bonds and other surety bonds, in which the company guarantees the performance of a third party.