Investor Offers $12.5 Million for California Amplifier Inc. : Takeovers: The bid comes from a Colorado businessman who already owns 5.9% of the struggling Camarillo firm’s shares outstanding.
A Colorado businessman has made an unsolicited, $12.5-million takeover bid for California Amplifier Inc., a Camarillo maker of home-satellite dishes and other microwave telecommunications products that has been struggling to maintain profitability.
Charles W. Ergen, who among other things heads Ecosphere Corp., an Englewood, Colo.-based distributor of satellite-television products, already owns 5.9% of California Amplifier’s 4.42 million shares outstanding and has made a tender offer of $3 a share for the remaining stock.
The stock, which has not traded above $2 a share for the past two years, closed Monday at $2.625 a share in over-the-counter trading.
Barry W. Hall, California Amplifier’s chairman and chief executive, said Monday that the company’s directors did not yet have a formal response to the bid, which was disclosed late Friday. He also said Ergen did not contact him directly to announce the offer.
Hall said, however, that Ergen earlier this year had signaled that he might be interested in a merger, but that “we indicated to him that the company was not for sale.” Still, Hall said, “We invited him to make any formal offer he wanted to the board for its consideration.”
Instead, Ergen bypassed the board and took his case directly to California Amplifier’s stockholders via his tender offer, which is set to expire Sept. 20 unless extended. The offer is also conditioned on a minimum of 2.1 million shares being tendered to Ergen, which would give him control of the company.
If he gets control, Ergen is promising a thorough review of California Amplifier’s business.
In his tender-offer documents filed with the Securities and Exchange Commission, Ergen said he would look particularly at the company’s research and development efforts “with the intention of eliminating projects which may not result in marketable products, and adding projects with greater market appeal.”
Ergen added, however, that he doesn’t now plan “to make significant changes in management or to divest any division or segment of the company.”
In its fiscal year that ended March 2, California Amplifier lost $508,000, contrasted with a profit of $226,000 the previous year. But the loss largely reflected discontinued operations, and its fiscal 1991 sales rose 31%, to $14.3 million from $10.9 million.
In its fiscal first quarter that ended June 1, California Amplifier’s profit jumped to $127,000 from $55,000 a year earlier, as sales edged up to $3.7 million from $3.5 million. The modest sales gain reflected the company’s decision to wind down its defense-products business and to focus on home satellite dishes and other commercial lines. Sales of those items jumped 47% in the first quarter.
Hall said the results show California Amplifier is making progress toward improving its financial health. Speaking of Ergen, Hall added, “I don’t need his management expertise.”
