Dataproducts Plans Talks With Potential Suitors

Dataproducts Corp. said Friday that it will begin holding talks with parties possibly interested in acquiring the Woodland Hills company that makes computer printers.

The company said it has instructed the New York investment banking firm of Goldman, Sachs & Co. to “contact selected companies which have been identified as qualified prospective strategic buyers.”

Chairman Jack C. Davis refused to identify any of the potential suitors and the board cautioned that it has not made a final decision to sell Dataproducts. The announcement forced up Dataproducts stock $1.875 to close at $16. Trading was unusually heavy.

Also on Friday, a New York investment group disclosed that it has boosted its stake in Dataproducts to 6.9%.

“We have been carefully considering making an offer for the company,” said John K. Castle, one of the New York investors. “We are very comfortable with Dataproducts’ announcement today because it may facilitate our making such an offer.”

Asked if Friday’s announcement might push up the price of Dataproducts stock and make the New York group’s takeover attempt more expensive, Castle responded, “that is always a risk but we’re confident we can make an offer.”

Davis said Dataproducts’ board decided to begin holding merger talks “so there will be an opportunity to enhance shareholder value in a maximum way.”

Dataproducts was considered a takeover target for much of last year because its stock languished below $10 a share even though it has substantial cash and little debt. The company also owns 21 acres of land in Woodland Hills that some real estate experts say may be worth $30 million or more.

In the year ended March 26, Dataproducts lost $20.2 million on sales of $345.2 million, contrasted with a profit of $9 million on sales of $338.8 million a year earlier. The loss was caused mostly by a $16-million charge to cover costs of a plant closing.