Group Scuttles Bid to Oust Trimedyne Chief

A group of shareholders in Trimedyne, a Santa Ana-based laser catheter maker, has ended its three-month effort to oust chairman Marvin Loeb from the company.

Chicago businessman Irving Harris and his associates have abandoned plans to wage a proxy battle to replace Loeb with Harris, according to documents filed Friday with the Securities and Exchange Commission.

“Now Trimedyne can get on with business unbothered,” said Loeb, Trimedyne’s founder and largest shareholder. Loeb owns about 10% of the company’s stock.

Analysts said the decision by the Harris group, which owns 7.4% of Trimedyne’s stock, is an affirmation of Loeb’s control of the company.

Frank Ingersoll, a medical technology analyst with Knibb Securities in San Antonio, said the Harris group lost its chance to win the battle in late February, when Howard Cooper, a Loeb ally, was appointed by the board to replace Michael Henson as Trimedyne’s president.

Henson, who led the company since 1983, resigned in early January, saying he had accomplished his goal of taking the company to profitability. Trimedyne reported earnings of $440,000 for its 1987 fiscal year, which ended Sept. 30.

Harris and his associates, who hold two seats on Trimedyne’s seven-member board, had said they wanted to appoint the new president.

“They didn’t get their choice, but I think Harris met with Cooper and liked him,” Ingersoll said.

Harris did not return phone calls Friday.

In its SEC filing, the Harris group said it will continue to monitor Trimedyne’s progress and might buy more shares or seek another buyer for the company.

Loeb said he isn’t worried about the group’s intentions.

“I presume they’ll go around to health companies and see if they can induce a buyer,” he said. “But we’ve installed all the anti-takeover provisions we need.”

Ingersoll said he is unsure what Harris might do next. “I think Trimedyne has excellent prospects, and the company is an excellent value,” he said. “I’d think investors would want to be buying stock.”

Trimedyne stock closed Friday at $14.50 per share in over-the-counter trading, up 50 cents for the day.

Loeb, who filed a lawsuit against Harris in February, accusing the Harris group of violating securities laws in its bid to gain control, said he has offered to drop the suit if the group resigns its two board seats.