CHICAGO (AP) — Allscripts Healthcare Solutions Inc. said Monday that it adopted a "poison pill" shareholder rights measure to ward off an unwanted takeover after the electronic health records company fired its chairman and reported a steep drop in first-quarter earnings last month.
The Chicago company said shareholders will be entitled to buy a new series of Allscripts preferred shares at a 50 percent discount under certain circumstances — if a person or group buys 10 percent or more of its common stock without board approval, for example.
Allscripts said the plan will allow stockholders to realize the long-term value of their investment and protect them from unfair takeover attempts. New Chairman Dennis Chookaszian said in a statement the board believes the company's current share price doesn't reflect its long-term potential. The stock has fallen more than 44 percent since the start of the year.
The company said the shareholder rights plan was not adopted in response to any hostile takeover attempt.
Allscripts appointed Chookaszian chairman April 30, a few days after it announced the firing of former Chairman Phil Pead and said three other directors had resigned from its board. The company said that Chief Financial Officer Bill Davis will leave this month as well.
Allscripts said late last month that its net income plunged 54 percent on lower sales, bigger investments in product development and other costs. Its adjusted earnings of 12 cents per share were half of what analysts expected.
Allscripts also cut its earnings outlook and now forecasts an adjusted profit of 74 to 80 cents per share in 2012, down from a previous projection of $1.06 to $1.10 per share.