Unhappy Director Bought Out After Value of Holding Declines
First Consulting Group Inc. has removed a persistent thorn in its side, spending $15.1 million to buy out nearly 2 million shares owned by disgruntled director David S. Lipson, its second-largest, non-institutional stockholder.
Lipson joined the board of the Long Beach-based health care consulting firm in December 1998 after his Integrated Systems Consulting Group Inc. was purchased by First Consulting in an all-stock deal valued at more than $100 million.
At the time of the sale, First Consulting’s stock traded at nearly $19 a share, and within the next two months it hit $25. However, by the time the six-month tie on Lipson’s stock sales lifted in May 1999, the stock was below $10. Since then it has bounced around mostly in the $5 to $10 range, peaking above $15 only briefly two years ago.
“David has been a frustrated shareholder for six years,” said Thomas Reep, the company’s vice president of investor relations.
Lipson, who in a February 2001 filed a statement with the Securities and Exchange Commission warning that he may seek a change in management, will be precluded from competing against First Consulting for five years, according to terms of the deal. The aggregate purchase price for the 1.96 million shares and 32,000 options repurchased represents an 11 percent premium over First Consulting’s closing price of $6.90 on Feb. 26.
Through his attorney, Lipson declined comment.
Laurence Darmiento
Metal Auction
Shares of International Aluminum Corp., a maker of aluminum doors and window frames, have jumped 10 percent since mid-February when the firm put itself on the auction block.
The Monterey Park-based company has hired Seidler Cos. to explore a sale of all or parts of the company to “maximize shareholder value.”
David Treinen, president of International Aluminum, said the decision to sell the company was based on several factors: the high cost of complying with Sarbanes-Oxley legislation and new rules implemented by the New York Stock Exchange and the Securities and Exchange Commission; consolidation in the home building products industry; and the age of the company’s founder, chairman and chief executive, Cornelius Vandestar, who is 89.
Vandestar, who founded International Aluminum in 1957 out of his Los Angeles garage, owns 40 percent of the shares. There are 1,450 employees at 12 different operating units in Arizona, Canada and Southern California.
“It has become very cost-prohibitive to run a company of our size and to meet all the requirements of Sarbanes-Oxley,” said Treinen, 64, who has worked for International Aluminum for nearly 40 years.
In December, Atrium Cos. bought competitor Superior Engineered Products Corp. for $52.5 million. In June 2001, industry giant Masco bought Milguard Manufacturing for $420 million.
“With their size and the number of industries they’re in, (a company like) Masco can absorb these costs a lot better than a company our size,” Treinen said.
Kate Berry
Spanish Offer
Liberman Broadcasting Corp., the Burbank-based Spanish-language broadcast company, plans an initial public offering to raise as much $184 million.
No date has been set for the offering, which is being underwritten by Credit Suisse First Boston, Deutsche Bank Securities and UBS Investment Bank.
The proceeds will be used to retire a portion of $303 million in long-term debt the company carried as of Sept. 30, 2003.
Liberman’s operations are divided mostly between Los Angeles and Houston. The L.A. cluster consists of four FM and two AM stations and a television station. The Houston cluster has five FM and four AM stations and a TV station. It also has TV stations in the Dallas and San Diego markets. All are Spanish-language.
The company was founded by Jose and Lenard Liberman, father and son, in 1987. They each hold 46.7 percent of the outstanding Class B common stock, which has 10 times the voting power of the Class A stock to be offered to the public.
San Fernando Valley Business Journal
