Gateway Announces September Offering of Common Stocks

Gateway Communications Inc. said it plans to make a public offering of 800,000 shares of common stock--including 400,000 shares being sold by the chairman of a competitor of the Irvine-based communications equipment maker. Bateman Eichler, Hill Richards Inc. and Needham & Co. Inc. are the underwriters of the offering, expected to be made in September.

According to the prospectus, Raymond Noorda, chairman of Novell Inc. of Orem, Utah, is selling 40.7% of his 980,577 shares. After the sale, Noorda’s ownership in Gateway will drop to 14.3% from 26.7%.

Noorda said he feels compelled to sell the holdings because Gateway and Novell buy parts from each other and compete in some equipment markets. He said he eventually plans to whittle his ownership in Gateway down to less than 5%.