Investor Wants Control of Newport Electronics : Bid to Buy 35% of Stock Complicates Plan to Merge With Sensor Control Corp.

Like the wedding guest who objects to the marriage at the last moment, a Connecticut investor has spoken up in a bid to ruin the proposed merger between Newport Electronics Inc. and a Silicon Valley company.

Milton B. Hollander of Stamford, Conn., who owns a 13% stake in Newport Electronics, launched a bid Thursday to take control of the Santa Ana firm, just one month before Newport’s proposed merger with Sensor Control Corp. of Sunnyvale is expected to be completed.

If Hollander’s bid succeeds, Sensor Control and Newport Electronics will not be able to complete their merger, Ronald L. Wilson, Sensor’s chief financial officer, said Friday.

“We’re still reviewing what his offer is and what it means,” Wilson said, “but we don’t think his offer is as good as ours.”

Newport Electronics directors discussed the Hollander bid at a meeting Friday, board member Norman Gray said. Gray said the board reached no decision about whether to recommend or reject the new offer.

Agreement Made in April

Newport agreed in April to be acquired by Sensor, a manufacturer of industrial sensors, for $9 a share, or $10.8 million. Officials of both companies said that the plans to merge are progressing and that the deal is scheduled to be completed in August.

The new bid from Hollander will complicate those proceedings, however.

Hollander, a self-employed engineer and former vice president at Gulf + Western Inc. (since renamed Paramount Communications) in New York, is proposing to buy 392,000 shares of Newport for $9.50 a share, or $3.7 million, raising his stake in the firm to 48%.

Hollander and his wife, Betty Ruth Hollander, are the sole owners of Omega Engineering Inc., a Stamford catalogue distributor of electronics instruments. Betty Hollander is the chief executive officer of Omega, and Milton Hollander is a director.

Omega is a customer of both Newport and Sensor, according to officials of both companies.

New Firm Makes Offer

Hollander, whose offer is being made through a new company called High Technology Holding Corp., said he wants to obtain working control of Newport, according to a filing made Thursday with the Securities and Exchange Commission.

According to the filing, Hollander has no plans to replace Newport Chairman Barret B. Weekes or any of the other current Newport officers, but he did say that he will seek representation on its board. Hollander also said he would consider selling Newport to Omega.

Wilson of Sensor said his company believes that its offer is better because it would pay $9 a share for 100% of Newport’s stock. Hollander’s bid would pay $9.50 a share for 35% of Newport’s stock.