Harris-Led Investor Group Increases Stake in Trimedyne Stock to 10.5%

An investor group that last winter attempted to oust Trimedyne Chairman Marvin Loeb has significantly increased its stake in the Santa Ana laser catheter maker.

The investor group, led by Chicago businessman William Harris, purchased 216,000 shares of Trimedyne, increasing its holdings from 7.4% to 10.5% of the firm’s common shares.

The group indicated that the stock purchase is intended as a long-term investment and that the group has no plans to influence or change the management of Trimedyne at the company’s upcoming shareholder meeting, scheduled for next month.

Harris purchased 216,000 shares of Trimedyne from Nycomed AS, an Oslo, Norway, company with which Trimedyne has a joint venture agreement, according to Trimedyne treasurer Richard A. Demmer.

“Mr. Harris called our chairman, Mr. Loeb, and made very clear that the purchase of shares from Nycomed is intended as a long-term investment in Trimedyne,” Demmer said.

“We are delighted that they (the Harris group) see fit to increase their holdings in Trimedyne. It appears that all the differences between Harris and Trimedyne have essentially been resolved,” Demmer said.

In February, Harris launched a three-month proxy battle to have Loeb replaced by Harris and to name a replacement for Trimedyne President Michael Henson, who had resigned. The attempted management shake-up, however, was dropped in April, after Howard Cooper was named the new president, a choice that was acceptable to both groups.

Also, the Harris group agreed several months ago to give up its two seats on Trimedyne’s seven-member board of directors when shareholders meet next month.

According to Hellen S. Dexter, a securities analyst with Deutsche Bank Capital Corp. in New York, there is every indication that the Harris purchase is friendly. Trimedyne, she said, is emerging from a development stage to a point where it is actively marketing its product.

The laser catheter enables doctors to clear blocked arteries without surgery. “The company has a bright future,” Dexter said.

On Friday, the stock closed at $16.875, up 12.5 cents on the day.

Trimedyne earned $2.3 million on $12.3 million in revenues for the six months ending March 31, compared to earnings of $116,000 on revenues of $4.3 million.