St. Ives Denies Takeover Rumors After Stock Soars

The stock of St. Ives Laboratories has been as hot as the devil lately.

Amid persistent Wall Street rumors that the Chatsworth manufacturer of personal-care products might soon get a takeover bid, St. Ives’ stock rose sharply last week in very heavy trading, the latest gain in a steady surge that began in January.

The stock closed Monday at $14.625 a share, down 37.5 cents, in national over-the-counter trading after advancing $1.875 last week. Last Tuesday alone, St. Ives’ stock jumped nearly 3 points before settling back to close with a 75-cent gain, as about 14 times the company’s normal trading volume changed hands.

The volatility prompted St. Ives to set aside its policy of not commenting on market rumors and announce last week that it was “not a party to any discussions or negotiations with any potential suitors.”

However, St. Ives also hinted that it was open to a deal by saying it periodically “examines its strategic direction and is currently doing so.”

St. Ives, with sales of $104 million last year, makes shampoos, skin lotions and other personal-care items that it markets under the “Swiss Formula” logo. The company went public in July, 1987, at $13 a share, then watched the stock drop below $6 last year before ending the year at $8.875 a share.

The stock got a boost early this year after Stephen Redding, a vice president of Nexxus Products Co., another personal-care products maker, disclosed that he bought 5.3% of St. Ives’ shares.

St. Ives’ shares spurted further early this month after Minnetonka Corp., a Minnesota-based cosmetics concern, put itself on the sales block. Traders apparently speculated that a new round of takeover interest in personal-products companies might be in the offing.

But St. Ives, in its announcement last week, dampened any speculation about a possible bid by Redding or Nexxus--to which St. Ives sells some products--by saying Redding recently sold 40,000 of his shares, paring his St. Ives stake to 4.9%. Redding had previously said he bought the stock as an investment.

Nonetheless, it’s unlikely that a takeover proposal would materialize without the blessing of St. Ives’ management. Gary H. Worth, chairman, and Robert Van Dine, vice chairman, together own a controlling 53.3% of the company’s stock.