Beazer Homes adopts shareholder rights plan aimed at preserving tax benefits from prior losses

Beazer Homes adopts shareholder rights plan

ATLANTA — Homebuilder Beazer Homes Inc. on Friday said its board adopted a new shareholder rights plan aimed at preserving the tax benefits it can book from its prior losses.

Under the plan, one right will be distributed for each outstanding share as of the close of business Aug. 10.

After that time, if anyone buys 4.95 percent or more of the company’s outstanding shares of common stock without the approval of Beazer’s board, the person or group’s voting power would be significantly diluted. Existing shareholders who currently hold more than that amount will trigger a dilutive event only if they buy more shares, the company said.

The reason for the plan, Beazer said in a release, is that a section of the tax code says an “ownership change” can limit the company’s abilities to book prior losses to reduce tax liabilities in the future. Several other homebuilders have recently adopted similar plans.

Beazer, like most homebuilders, has booked losses because of the housing market collapse. In May, the company posted a $114.9 million for the three months ended March 31. Its last reported profit was for the quarter ended Sept. 20, 2006.

The plan will remain in effect for 10 years, unless shareholders vote it down at the company’s next annual meeting.

Beazer shares closed up 5 cents at $3.22. The stock has changed hands between 24 cents and $9.34 in the past 52 weeks, and has doubled since the start of the year.