Investor’s Verit Stock Repurchase Boosts Price

Arthur Dalfen, a Bermuda investor, reacquired a major stake in Verit Industries and said he might push for the Sun Valley company to merge or make an acquisition in order to lift its stock price.

The stock got a temporary boost merely from Dalfen’s investment. After disclosing his purchase last week in a filing with the U.S. Securities and Exchange Commission, Verit’s stock jumped 87.5 cents--or 19%--to $5.50 a share on the American Stock Exchange. The stock closed at the same price Monday.

Verit builds stereo loudspeakers and distributes other consumer products, particularly “close-out” merchandise purchased from other manufacturers. The company has been struggling recently, losing $726,000 on sales of $8.13 million in the nine months that ended March 31.

Verit blamed much of the loss on a lawsuit it has filed against Anthon’s Furs, a fur dealer in Orange County. Verit alleged that it paid $580,000 to Anthon’s for a shipment of furs in late 1986, but never got delivery. Anthon’s, which subsequently entered bankruptcy proceedings, has denied any wrongdoing.

Dalfen owned 9.9% of Verit in mid-1985, but gradually sold his holdings in 1986 as Verit’s stock climbed toward $20 a share--its high point of the last three years. However, Dalfen repurchased 41,300, or 5.4%, of Verit’s 759,794 total common shares outstanding between April 8 and May 19. He paid $134,450 for the stock, or an average of $3.25 a share.

In a telephone interview, Dalfen termed his investment as friendly, and said he planned to limit his stake to less than 10% of Verit’s total shares. He said he bought the stock because it is now undervalued relative to Verit’s book value--the amount of its assets minus its liabilities--of $6.10 a share as of March 31.

Dalfen also said he might propose a merger or acquisition to Verit Chairman Lavere G. Lund, who owns 41% of Verit, in an effort to bolster Verit’s stock price. “Over the next several months I most likely will show him a few deals,” Dalfen said. “If he likes it, fine. If not, he’ll pass.”

Lund declined to comment on Dalfen’s investment.