Directors of Newport Electronics Inc. in Santa Ana rejected a last-minute offer to sell 35% of the company's stock for $9.50 a share in favor of an offer to sell all the stock for $9 a share.
Newport Electronics agreed in April to be acquired by Sensor Control for $9 a share, an offer that values the company at $10.8 million. The two companies plan to complete the acquisition next month.
But two weeks ago investor Milton B. Hollander offered $9.50 a share, or $3.7 million, for 35% of Newport Electronics' stock. Hollander already owns 11% of the company.
Newport Electronics said it turned down Hollander because Sensor Control's offer for the entire company is "more favorable to the shareholders." The board made that decision in the last week during a flurry of meetings, a spokesman said.
Sensor Control is a Sunnyvale manufacturer of heat and pressure sensors used to run machines on factory assembly lines.
Newport Electronics makes the meters used to read such sensors. Sensor Control is a customer.
So is Hollander's company, Omega Engineering Inc., a Stamford, Conn., catalogue distributor of electronic instruments. Hollander is also a former vice president of Gulf + Western Inc., now Paramount Communications.
Hollander told the federal Securities and Exchange Commission earlier that if he gained the additional 35% of Newport Electronics' stock and working control of the company, he might use it only to gain a seat on the board or even to sell the company to his own Omega Engineering.