N.J. Investors Seek Control of Computer Firm
A New Jersey investment group said Tuesday that it will seek control of Chatsworth-based Computer Memories, a once-thriving maker of computer disk drives that liquidated nearly all its assets this year after IBM stopped buying its products.
The group, led by investors Paul and Natalie Koether, is the second one to show interest in buying Computer Memories, which no longer manufactures disk drives but has $30 million in cash and about $15 million in tax benefits that a buyer might want. In September, a group that includes Beverly Hills stockbrokers Bertram Cohen and Jay Goldinger disclosed that it owns 8.4% of the company’s stock and might seek control.
The Koethers, of Far Hills, N.J., have been accused by companies they invest in of seeking “greenmail,” the practice of asking companies to buy back stock at a premium to end a hostile takeover threat. Companies that have bought out the Koethers in the past include Seaway Food Town of Maumee, Ohio, and Minneapolis-based Scientific Computers.
Decline Comment
The Koethers declined comment Tuesday. But in a filing with the Securities and Exchange Commission, the Koethers said their group bought 602,000 Computer Memories shares, or a 5.4% stake. The group--which includes three companies headed by the Koethers--may seek control of Computer Memories by buying more shares or launching a proxy fight, according to the filing.
The group also said it offered to buy the 1.73 million shares owned by Intel Corp., the Santa Clara, Calif.-based semiconductor company that is Computer Memories’ largest shareholder, for nearly $4.1 million and a warrant to buy stock in Sun Equities, one of the Koethers companies.
A spokesman for Intel, which has said it wants to sell its 15.6% stake, said it rejected the offer as inadequate.
Less than two years ago, Computer Memories was one of the nation’s leading makers of disk drives, which store and retrieve data in personal computers. The company’s fortunes began unraveling when IBM, which accounted for 79% of its $116.2 million revenue in the year ended March 31, 1986, decided in mid-1985 to stop buying the Computer Memories’ drive for its AT-model personal computer.
Computer Memories Chairman Irwin Rubin, who could not be reached for comment, has said he wants to find a buyer for the company or use the company’s cash to make an acquisition.
