Deals | Thu Sep 6, 2012 1:50pm BST

Digital Generation adopts poison pill

Sept 6 (Reuters) - Digital Generation Inc adopted a shareholder rights plan a month after it said it was considering a sale of the company.

The advertising distribution company rejected a takeover bid by rival Extreme Reach Inc, Reuters reported in June.

A shareholder rights plan, also called a poison pill, allows companies to issue new shares if an investor acquires shares over a certain threshold, diluting their holdings.

Digital Generation said the poison pill, in place until March 5 2013, will trigger if a shareholder acquires more than 10 percent of the company's shares.

Analysts have said that Digital Generation, formerly known as DG FastChannel, is a potential acquisition target for companies such as Google Inc and Yahoo Inc.