Group Would Oust Chairman of Trimedyne : 4 ‘Concerned’ Over Company’s Direction
Four Trimedyne shareholders who say they are “concerned about the company’s direction” in the wake of President Michael Henson’s resignation, are preparing to wage a battle to replace Chairman Marvin Loeb with Irving Harris, a Chicago businessman and philanthropist.
The Harris-led group, which includes two of Trimedyne’s seven board members and owns 7.4% of the medical laser company, has announced its intent to oust Loeb in an ownership statement filed with the Securities and Exchange Commission.
In an interview Tuesday, Harris said the group plans to solicit shareholder proxies to obtain enough votes to elect its own slate of directors. The Harris group is the company’s second-largest shareholder. Loeb, with 12.3%, holds the biggest single block of stock.
Harris said the four investors don’t want to acquire the company but have organized to oust Loeb because he has declined to step down as chairman.
‘At Crossroads’
“The company is at a crossroads and needs mature management right now,” said Harris, 77, president of Standard Shares, a New York-based holding company.
While Harris considers himself the best candidate for the chairmanship, he has not disclosed his choice for president of the 6-year-old company, which just recently began marketing the laser products it was founded to develop.
Henson, who was Trimedyne president since 1983, resigned last month, saying that he had accomplished his purpose of taking the company to profitability from its start-up stage. He could not be reached for comment Tuesday.
Trimedyne, which received Food and Drug Administration approval last March to market its laser catheter for the treatment of arteriosclerosis in the legs, recently completed the first profitable year since it was founded in 1981. The company earned $440,000 on sales of $12.3 million for its fiscal 1987, which ended Sept. 30.
Henson said when he announced his resignation plans in December that the company had been grooming Trimedyne executive Rick Randall, now acting president, to take over the presidency. But the company’s directors issued a statement that same month saying a search committee is seeking candidates for the top operating job.
Unavailable for Comment
Loeb, who was unavailable for comment Tuesday, said in a prepared statement that he had not reviewed the Harris group’s SEC filing.
Deciding the outcome in the brewing battle for control of the board could be a tough call, according to Jim McCamant, editor of the Medical Technology Stock Letter in Berkeley.
Loeb’s 600,000 Trimedyne shares are the largest single holding, with ownership of the remaining 4.7 million shares widely scattered. The Harris group holds 468,800 shares while Citicorp, which owns 328,000 shares, is the third largest holder.
Officials at Citicorp were not available for comment Tuesday.
“There’s got to be concern now” among all the shareholders as to the future direction of the company, McCamant said. “Henson has always impressed people favorably. Marvin Loeb can leave a strong and mixed impression.”
Loeb, who has described himself as a medical entrepreneur, has started more than a dozen medical technology firms.
Harris, who maintained that he isn’t seeking to bring upheaval to Trimedyne, said that several current board members--including Loeb--would be included in his group’s slate.
“We want to expand the board, to bring in more experience,” said Harris, a former chairman of Pittway, a Northbrook, Ill., maker of burglar and fire alarms.
Harris also said he would seek to keep Henson on the board. Henson, who has taken a position at a start-up company in Northern California, has resigned from the Trimedyne board effective Feb. 29.
TRIMEDYNE CHRONOLOGY 1981--Trimedyne is started by Marvin Loeb, a self-proclaimed medical entrepreneur.
April 13, 1982--Company issues public offering.
1983--Michael Henson joins the company and is then named president.
January, 1985--Chicago businessman Irving Harris and his associates, who have been shareholders since 1983, increase their ownership to 5.6%.
March, 1987--Company becomes first firm to receive Food and Drug Administration approval to market a laser catheter to treat arteriosclerosis in the legs.
Nov. 5, 1987--Company reports its first profitable year, with earnings of $440,000 for fiscal 1987, which ended Sept. 30. Sales topped $12.3 million.
Dec. 15, 1987--Henson announces his resignation, effective Jan. 31. Rick Randall is named acting president.
February, 1988--Harris and his associates notify the Securities and Exchange Commission that they have a 7.4% stake in the company. Harris, seeking to replace Loeb as chairman, announces plans to solicit proxies for the election of directors nominated by his investor group.
