EMachines OKs Buyout by a Founding Director

Low-cost personal computer maker EMachines Inc., which expects to pull itself out of the red this quarter, said Tuesday that its board unanimously approved a $159-million buyout offer from one of its founding directors.

Under the agreement, director Lap Shun “John” Hui of Garden Grove would offer $1.06 a share in cash for the stock he doesn’t already own. Hui has a 1.26% stake in the Irvine company.

The purchase price values EMachines, the nation’s third-largest vendor of desktop PCs in stores, at about $161 million.

Hui has said he intends to retain current management. He helped bring in veteran retailer Wayne R. Inouye this year as president and chief executive to revamp the company, said Diana L. Maranon, a spokeswoman for Hui.

EMachines has lost $295 million since early 1988, but executives told Wall Street analysts in October that the company would break even or post a slight profit for the final three months of the year.

The tender offer, through Hui’s EM Holdings Inc., will begin by Monday and be open for four weeks. Hui has support from investors holding 55% of the stock but needs at least 90% of the shares tendered to complete the transaction with minimal red tape.

Hui’s price, revealed late Monday, was nearly double the stock’s closing price that day. On Tuesday, the stock hit a 52-week high of 92cents a share before closing at 91cents, up 37 cents, in over-the-counter trading.