Intermark Inc. Sells Its Stock in Square D

Seeking to reduce its prime-rate bank debt, Intermark Inc. on Thursday said it has sold $22 million worth of common stock it owns in Square D, an Illinois-based electronic and electrical products maker.

Intermark sold 551,000 of its 566,466 shares of Square D common at $40 per share, according to Mitchell Woodbury, vice president and corporate counsel of the La Jolla-based operating/holding company, which owns all or part of nine other companies.

“We’ve held (the stock) as an investment only,” said Woodbury, adding that the stock represented only 1.9% of Square D’s total outstanding shares.

The shares were acquired by Intermark in February, 1983, as part of the company’s sale of Topaz, which was then a 64%-owned public subsidiary of Intermark, to Square D.

Intermark later issued subordinated debt with attached warrants to purchase 561,009 of the Square D shares, but, in 1985, completed an exchange offer, giving it clear title to most of the stock. More than 14,700 shares remain subject to outstanding warrants.

Although the company bought the shares at $34 per share, Woodbury said Intermark virtually broke even on the sale because “we added to the per-share book value all the costs associated with the exchange offer.

The $22 million in proceeds will be used to reduce Intermark’s $30 million in bank debt, which was borrowed at prime rate, said Woodbury.

In the company’s 1985 annual report, released in May, Intermark’s president and chief executive, Charles (Red) Scott, wrote that the stock “represents over $20 million of ‘dry powder.’ . . . While we have no current intention of disposing of the stock, it is most reassuring to have that resource available.”