Wilshire Enterprises (AMEX:WOC) may find itself in trouble soon as Bulldog Investors is more actively attempting to remove the company's poison pill. Poison pills - now more commonly referred to as "Shareholder Rights Plans" - are tools used by management to avoid hostile takeovers. They come in the form of provisions written into a company's charter that allow the company to dilute ownership, increase debt, grant options, or take a variety of other actions to make takeovers targets less attractive to potential acquirers. While these are useful in some cases, they are often seen as a tool to help managment and the board protect their jobs at shareholder expense. Bulldog Investors alleges that this is the case; they believe the company's current poison pill is too restrictive and should be removed in order to best serve shareholders.

In a letter attached to a recent 13D/A filing, they stated:

"As you know, Full Value Partners L.P. is a member of a group that owns almost 15% of the outstanding common stock of Wilshire Enterprises, Inc. (WOC) and is its largest outside shareholder.

When we met on September 26, 2006 I requested that the board either eliminate or raise the threshold of WOC's poison pill.  In general, we believe that poison pills act to insulate and entrench incumbent boards and managements thereby making them less accountable to shareholders.  The situation at WOC is particularly disturbing in that your father's estate owns over 21% of WOC stock, well in excess of the 15% threshold at which the poison pill would be triggered by any other shareholder.

During a subsequent telephone call we again asked you to recommend that the board eliminate or raise the threshold of the poison pill.  We have yet to get a response.

Our patience is not boundless.  Therefore, we have decided that unless the board acts by December 5, 2006 to eliminate or lift the threshold for WOC's poison pill to 21%, we intend to (1) present a proposal at the next shareholder meeting to eliminate the poison pill and to elect directors that will support that proposal; and (2) commence litigation to eliminate the poison pill.

It is unfortunate that one result of these actions will be that WOC will incur costs it can ill afford given its tiny size.  But what choice do we have given your failure to respond to our previous requests to address our concerns?" (Read More)

If the poison pill provisions are removed or lowered, it could mean potential bids for the company. This makes WOC a stock worth watching in the following months.

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