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Foamex shares plunge 43.5% on stock offer

Shares in Foamex International Inc. plunged 43.5 percent today as the company announced a rights offering that allows investors to acquire stock in the company at $1.50 a share.

Shares in Foamex International Inc. plunged 43.5 percent today as the company announced a rights offering that allows investors to acquire stock in the company at $1.50 a share.

The company's shares had opened at $2.60 and fell $1.13 on the news.

Foamex, a persistently troubled company this decade, said the deal would help unload debt in the company. Foamex is based in Linwood, Delaware County, and is one of the nation's largest manufacturers of foam cushioning for mattresses. It filed for bankruptcy protection in 2005 and emerged from bankruptcy last year. The company has rehired John "Jack" Johnson Jr., who had led the company in its last era of sustained profitability from 1999 to 2001.

The rights offering is available to stockholders and second-lien loan lenders and, the company said, could produce $80 million to reduce debt under its first-lien term credit agreement.

Contact staff writer Bob Fernandez at 215-854-5897 or bob.fernandez@phillynews.com.