DOW JONES NEWSWIRES 
 

Beazer Homes USA Inc.'s (BZH) board of directors announced a stockholder rights plan as it becomes the latest home-building company to take action to preserve potential income-tax offsets.

Under Internal Revenue Service code, a so-called change in control could be triggered if shareholders who are determined to own 5% or more of a company's stock increase their collective ownership by more than 50% over a three-year period, according to JPMorgan's Michael Rehaut.

Such a change would "substantially" limit Beazer's use of net operating losses and other tax benefits, the company said.

In Beazer's case, its 10-year plan calls for significant dilution in voting power of an individual or group if it acquires at least 4.95% of shares outstanding without board approval. The company said it will seek shareholder approval of the rights plan at its next annual meeting.

Builders are particularly vulnerable to tripping the ownership-change provision because trading of the companies' stocks have been heavy amid their shrunken market values. Home-building companies such as Ryland Group Inc. (RYL), Hovnanian Enterprises Inc. (HOV) and Pulte Homes Inc. (PHM) previously adopted shareholder rights plans.

Beazer's shares closed up 1.6% to $3.22. The stock has doubled this year, but is down steeply from its all-time high of over $82 in 2006.

-By John Kell, Dow Jones Newswires; 212-416-2480; john.kell@dowjones.com