Milwaukee's largest publicly owned thrift company has adopted a shareholder rights plan that would make it easier to fend off unwelcome suitors.

St. Francis Capital Corp., the $1.6 billion-asset parent of St. Francis Bank, adopted a plan designed to dilute its stock should a hostile party begin accumulating shares.

St. Francis' board could carry out the poison pill plan if an unfriendly shareholder bought 15% of its common shares or if a smaller shareholder began acting aggressively.

Under the plan, shareholders of record Oct. 10 will be issued rights to buy shares of a new preferred stock should the board of directors put the plan into action. Each shareholder would get the right to buy 0.01 share of a new preferred stock for each share of common stock already owned.

Since the rights are to be issued only to Oct. 10 shareholders, newcomers would not have the right to buy the preferred shares. If the plan is invoked, the newer stockholders' position would be diluted and the threat of an unwanted takeover would be lessened, said Jon D. Sorenson, St. Francis' chief financial officer.

Mr. Sorenson stressed that St. Francis' board of directors did not adopt the shareholder rights plan in response to any current threat of a takeover. Rather, the plan is designed as a protective measure.

"It's there to make sure all shareholders are treated fairly," he said.

While no bank has ever exercised its poison pill, Mr. Sorenson said the Milwaukee business community recently watched from the sidelines as manufacturer Harnischfeger Industries attempted a hostile takeover of Fond du Lac-based Giddings & Lewis, another manufacturer. Giddings & Lewis' shareholder rights plan succeeded in stalling off Harnischfeger.

"It's a classic example of why you want to have this in place," he said of the Harnischfeger case.

Despite adopting the shareholder rights policy, St. Francis' board is still legally required to analyze any serious buyout offer. Since March, two of the city's largest thrift companies have been acquired, leaving St. Francis as Milwaukee's largest publicly owned thrift. Mutual Savings Bank, a mutual thrift, is the largest, with $1.8 billion of assets.

Security Capital Corp., previously Milwaukee's largest thrift, with $3.6 billion of assets, was sold to $15.4 billion-asset Marshall & Ilsley Corp. And Green Bay, Wis.-based Associated Banc-Corp. has announced its deal to buy First Financial Corp., a $5.8 billion-asset company based in Stevens Point, Wis., that held the No. 3 market share among Milwaukee thrifts.

Kenneth M. Hemauer, a bank analyst at Robert W. Baird & Co. in Milwaukee, said St. Francis may be attractive to a regional banking company looking to strengthen its hold on the Milwaukee market, such as $83.9 billion-asset Norwest Corp. or $72 billion-asset U.S. Bancorp, both of Minneapolis.

However, Mr. Sorenson insisted that St. Francis plans to stay independent.

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