Shareholders oppose stock plan> CMP investors want stock option open

AUGUSTA — Central Maine Power Co. shareholders voted to seek revocation of an anti-takeover measure adopted eight months ago by the board of directors, CMP officials said this week at the company’s annual meeting.

Chairman Carlton Reed said the board would “look into” the recommendation after the resolution was approved by 50.4 percent of votes cast.

The plan adopted last fall would allow incumbent shareholders to buy new shares at discount in the event a would-be buyer sought to acquire 20 percent or more of CMP’s outstanding shares. The company said a potential acquirer would have to offer the same price for at least 80 percent of outstanding shares to avoid triggering the plan.

CMP directors cast the “shareholder rights plan” as a move to protect the long-term value of company stock and fend off the possibility of a takeover attempt offering some shareholders a premium price for their shares.

But the plan was denounced by Portland lawyer Peter Murray as a “poison pill” limiting shareholder rights and potentially devaluing stock by restricting the ability of some shareholders to take advantage of favorable offers.

Murray, who led the fight to terminate the plan and summarized his argument at Wednesday’s meeting, said afterward he was “thrilled” by the outcome.

As a longtime CMP investor, Murray said he maintained confidence in the leadership of Maine’s largest power company, which had been rebounding from precarious financial status until the March revelation of widespread cracking at the Maine Yankee nuclear power plant it co-owns in Wiscasset.

But Murray said the anti-takeover plan provided the board and management with a “temptation” toward action that might not serve the best interests of shareholders.

Even if the adoption of the plan prompted no major change in the price of CMP’s shares last fall, Murray said it could “put a dampening on the stock” if and when it starts to advance.

CMP shares, which were traded as high as $24.50 two years ago, have plunged to $11 or below in recent months.

CMP President David Flanagan told hundreds of shareholders Wednesday that the extended shutdown and repair demands at Maine Yankee had been a “tremendous adverse blow” to the company, but that he did not believe it would “frustrate” the utility’s performance in the long term.

Flanagan said the company, which owns 38 percent of the atomic plant, would be able to make up as much as $15 million in repair costs within three months after it is returned to service and that “sleeving” thousands of steam generator tubes would enable it to operate economically until its license expires in 2008.

CMP, which cut its operations and maintenance budget by $22 million in 1994, plans additional cuts worth $16 million this year, Flanagan said.

CMP, which paid $373 million to such producers last year out of $905 million in operating revenue, has complained repeatedly that its rates have been driven dramatically upward because it has been locked into long-term contracts with nonutility generators at unfavorable prices.