ABI’s Director Makes a Higher Offer for Stock in Renewed Takeover Bid
Renewing his takeover bid for ABI American Businessphones, company director Jean R. Stiegemeier on Monday hiked his all-cash offer for the Irvine business-telephone company to $11 per share, or about $18.4 million.
Stiegemeier, whose earlier unsolicited $10-per-share offer was rejected by ABI’s board last month, gave the company until noon next Monday to respond to his latest proposal.
ABI president Frank J. Feitz said in a statement that the company’s board “will consider Stiegemeier’s new proposal before it expires.” Feitz declined through a company spokeswoman to comment further on the offer.
ABI’s stock closed Monday at $10.75, up 75 cents on the American Stock Exchange.
Stiegemeier, a Minnesota investor, holds 5.4% of ABI’s common stock and is offering to pay $11 for each of the shares he does not already own. His earlier proposal of $10 per share was viewed by some investment analysts as too low for the fast-growing company.
The $11-per-share offer “is still too cheap,” said F. Van Kaspar, a San Francisco stock analyst. “I think it’s ridiculous here for an insider to try to steal the company from the public shareholders.”
Stiegemeier’s new proposal came on the same day that ABI posted record revenue and profit for its fiscal year ended June 30. The firm reported that net income for the year rose a strong 30% to $1.43 million, up from $1.1 million last year. Revenue rose 11% to $30.1 million, up from $27.1 million.
For the fourth quarter, net income was up 18.8% to $392,000, from $330,000 a year earlier. Revenue increased 14.4% to $8.1 million, from $7 million a year ago.
ABI said its fourth-quarter net income was reduced $195,000 due to expenses resulting from an unsuccessful merger with Connecticut phone manufacturer TIE/Communications. The deal fell through last May after a Los Angeles brokerage withdrew a report endorsing the merger as fair to shareholders.
Feitz, who founded ABI in 1982, owns about a third of the company’s stock. Other top managers control another 16%. Because of management’s large stake, Stiegemeier will have a difficult time taking control of the Irvine firm without management’s consent.
The Minneapolis investor is trying to line up financing for the deal through Mesirow Capital Markets, a Chicago investment firm. Mesirow said it is “highly confident” that it will be able to finance Stiegemeier’s offer for ABI according to a filing with the Securities and Exchange Commission.
In a July 15 letter to Stiegemeier, Mesirow said that before it makes a “firm commitment” to finance the $11-a-share offer, it must review ABI’s financial records and meet with the management of the Irvine company.
