PairGain Takes Action to Prevent Takeover

PairGain Technologies Inc., long rumored to be a prime takeover candidate, said Tuesday its board has approved a “poison pill” designed to thwart any hostile takeover bid.

The Costa Mesa-based provider of telecommunications equipment announced the measure after the stock market closed.

Under the plan, shareholders will receive rights to purchase a bigger stake in the company if a person or group acquires more than 15% of PairGain’s stock. The rights will be issued as a dividend to shareholders on Dec. 14.

The move “is designed to guard against partial tender offers and other abusive and coercive tactics that might be used in an attempt to gain control of the company,” PairGain said in a prepared statement.

Rumors that PairGain could be a takeover target have circulated since June.

The stock closed Tuesday at $8, off 3 cents a share. PairGain shares hit a 52-week low of $6 in October.