Shareholder Wants Control : ABI President Not Interested in Selling Stake
Frank J. Feitz, founder and president of ABI American Businessphones Inc. of Irvine, said he is not interested in selling his one-third stake in the company to director Jean R. Stiegemeier.
In a Securities and Exchange Commission filing, Stiegemeier said he is interested in acquiring control of the fast-growing distributor of business telephones. Stiegemeier, a Minnesota investor, currently owns 5.4% of ABI’s shares.
“We’re a public company, and I can’t stop him (Stiegemeier) from expressing a desire to do something,” Feitz said in a telephone interview Tuesday from New York. “We are not actively looking for someone to buy ABI.”
Stiegemeier has served as a director and consultant to ABI since selling his Torrance phone service company to ABI in 1985. Feitz said Stiegemeier has not been critical of ABI’s management. “Jean has not been adversarial in any way,” Feitz said. “I guess he’s interested because (the company) is doing so well.”
Feitz owns about 33% of ABI’s stock. Other ABI managers, excluding Stiegemeier, own an additional 10%. Asked if he was interested in selling his interest in the company, Feitz said flatly: “No.”
Feitz said he doubted that Stiegemeier could succeed with an unfriendly takeover of ABI without the cooperation of ABI management. “But,” he added, “anything’s possible.”
Jack Sullivan, a San Francisco investment banker, doubts ABI’s management will want to sell its interest in a company that is growing quickly and has been highly profitable. He believes that ABI will continue to post strong growth in revenues and earnings this year, which could push the stock price higher.
ABI’s stock closed Tuesday at $9.875 a share, down 50 cents in American Stock Exchange trading after posting a gain of $1.50 on Monday.
“There’s a natural tendency for management to want to cash out,” Sullivan said. “But I don’t think you will see management sell any of its stake with the stock at these levels. The future of the company is simply too positive (for management) to want to give up that growth.”
Last December, ABI’s management agreed to sell the company to TIE/Communications, a Connecticut phone manufacturer. Shortly after the merger was announced, ABI reported a sharp increase in revenues and profits, which had the effect of enhancing the company’s value.
ABI canceled the TIE merger after the investment bank that had originally determined the merger was fair to ABI shareholders changed its opinion several months later.
For the third quarter ended March 31, ABI reported earnings of $503,000, up 54% over year-earlier earnings of $326,000. Sales rose 15% to $8 million, from $6.9 million.
Feitz said he has agreed to meet with Stiegemeier on Thursday in Irvine to discuss the possible offer. Stiegemeier’s filing did not disclose what price he might offer for ABI’s shares.
Stiegemeier could not be reached for comment Tuesday.
