GCP Applied Technologies, once part of US technology and chemical company W.R. Grace, has adopted a stockholder rights plan – or poison pill – to prevent activist hedge fund 40 North from taking a controlling stake in the company.

Under the Hart-Scott-Rodino US antitrust act, 40 North has been cleared to buy as much as 50% of GCP’s common stock. The fund publicly disclosed on Mar. 15 that it had acquired 24.6%.

GCP’s board of directors has declared a dividend distribution that gives shareholders the right to buy one share of preferred stock for each share of common stock held. Each right will entitle the stockholder to acquire one one-hundredth of a share of a new series of preferred stock at a price of $150/share, diluting 40 North’s stake and voting power in GCP.

The rights plan, exercisable only if an investor acquires a stake of 15% or more, will expire on Mar. 14, 2020. GCP said the plan also provides the board with time to make informed decisions that are in the best interests of GCP and stockholders and does not deter directors from considering any offer that is fair.

“We adopted the rights plan to ensure all stockholders have the ability to realize the value of their investment and a voice in the future of GCP. The board believes that it is in the best interests of all stockholders to guard against efforts to obtain control of GCP without paying all stockholders a control premium, especially as the board continues the process of evaluating strategic alternatives that we announced on February 27, 2019,” said GCP Chairman Ronald Cambre.

GCP said alternatives could include a sale, a strategic business combination, the continued execution of its business plan or a combination of these.

In 2017, together with another hedge fund, Corvex, 40 North managed to scupper the proposed Clariant-Huntsman merger. The funds later sold their 24.99% stake in Clariant to Saudi chemicals giant Sabic for an estimated $2.5 billion.

Earlier this month, GCP reached agreement with another activist investor, Starboard Value, to appoint two independent directors to its board with immediate effect. Starboard holds a 4.6% stake in GCP.

Headquartered in Cambridge, Massachusetts, GCP launched as a stand-alone company in February 2016, offering a range of construction products and packaging technologies.