Settling a Dispute in The Corporate Family

One of the risks for a public company whose chief stockholder is another public company is that relationships can get testy. There have been an increasing number of these falling-outs in recent months, and a poison pill often plays a central role in the complications. In a recent example, American Medical Security Group Inc. (AMSG), a Green Bay, Wisc.-based health care benefits and insurance firm, sparred with Cobalt Corp., the Milwaukee-based parent of the state’s Blue Cross & Blue Shield operation. Cobalt, which has hired investment bankers to evaluate possible offers, wanted AMSG to repurchase its 45% interest in that firm and considered offering a stockholder proposal to rescind AMSG’s pill. Cobalt apparently feared that its sale would have triggered the AMSG pill. To settle the argument, AMSG amended the pill to clarify that it would not kick in if Cobalt was sold and Cobalt agreed not to offer a rescission proposal through the end of 2003. Companies that voted in pills during December and January included: Active Power Inc.; Advanced Neuromodulation Systems Inc.; Artisan Components Inc.; Avici Systems Inc.; Boardwalk Associates; Caliper Technologies Corp.; Catalytica Energy Systems Inc.; Common-wealth Energy Corp.; Computer Services Inc.; CRIIMI MAE Inc.; eSoft Inc.; First Sentinel Bancorp; and HomeGold Financial Inc. Also: ISTA Pharmaceuticals Inc.; Laboratory Corp. of America Holdings; Mykrolis Corp.; New Frontier Media Inc.; RCN Corp.; SBA Communica-tions Corp.; Standard Pacific Corp.; Texas Biotechnology Corp.; Union Acceptance Corp.; and Vicon Industries Inc.