Coloradan Bids for California Amplifier
A Colorado businessman has made an unsolicited, $12.5-million takeover bid for California Amplifier Inc., a Camarillo maker of home-satellite dishes and other microwave telecommunications products that has been struggling to maintain profitability.
Charles W. Ergen, who among other things heads Ecosphere Corp., an Englewood, Colo.-based distributor of satellite-television products, already owns 5.9% of California Amplifier’s 4.42 million shares outstanding and has made a tender offer of $3 a share for the remaining stock.
Barry W. Hall, California Amplifier’s chairman and chief executive, said that Ergen earlier this year had signaled that he might be interested in a merger but that “we indicated to him that the company was not for sale.” Still, Hall said, “we invited him to make any formal offer he wanted to the board for its consideration.”
Instead, Ergen bypassed the board and took his case directly to California Amplifier’s stockholders via his tender offer, which is set to expire Sept. 20 unless extended.
In his tender-offer documents filed with the Securities and Exchange Commission, Ergen said he would look particularly at the company’s research and development efforts “with the intention of eliminating projects which may not result in marketable products and adding projects with greater market appeal.”
In its fiscal year that ended March 2, California Amplifier lost $508,000, contrasted with a profit of $226,000 the previous year.
But the loss largely reflected discontinued operations, and its fiscal 1991 sales rose 31%, to $14.3 million from $10.9 million.
In its fiscal first quarter that ended June 1, California Amplifier’s profit jumped to $127,000 from $55,000 a year earlier, as sales edged up to $3.7 million from $3.5 million. The modest sales gain reflected the company’s decision to wind down its defense-products business and to focus on home satellite dishes and other commercial lines. Sales of those items jumped 47% in the first quarter.
