business

A California company says it would like to acquire Analysts International Corp., an Edina-based IT consulting company, for a 35 percent premium, but Analysts' board isn't interested.

Analysts International, whose stock closed Tuesday at $1.30, said the unsolicited $1.75-per-share cash offer, made earlier this month by Koosharem Corp., a Santa Barbara, Calif., staffing firm, is inadequate. It was Koosharem's third offer to Analysts International in the past year, and it came to light only because Koosharem and its owners now hold 5.3 percent of Analysts' stock, requiring them to file documents with the Securities and Exchange Commission.

None of the previous offers was made public. Koosharem also made a nonbinding offer of $2.20 a share in cash in February 2007, a time when Analysts International stock was at $1.76 per share, and a nonbinding offer of $1.75 in cash last December, when Analysts' stock was at $1.54, according to SEC documents.

Koosharem, which does business as the "Select Family of Staffing Companies," accused Analysts International in SEC documents of ignoring its legitimate offers, saying it had "repeatedly attempted to engage Analysts' management and board of directors ... to no avail."

But Analysts said its board found the offer inadequate because it contains contingencies such as the word "nonbinding," proposes a share price that is too low and is "opportunistic" in the sense that it was made before the new CEO's restructuring plan has had time to show results at the 2,600-employee firm.

Analysts' restructuring plan involves hiring new management and consultants, taking a $17 million fourth-quarter charge and repositioning the firm to provide exclusively IT expertise rather than dabbling in unrelated areas, CEO Elmer Baldwin said.

Despite the board's negative opinion, the offer is legitimate, said Michael Grimes, a mergers and acquisitions attorney at Briggs & Morgan in Minneapolis. " 'Nonbinding' just means the offer can't be legally enforced and that most of the terms and conditions have yet to be worked out," he said.

Shareholder Doug Bonestroo of Eden Prairie agreed with the board that the bid was too low, but he disagreed with keeping the offers secret.

"The quieter this is kept, the less urgency there may be for other prospective buyers to come forward," he said.

Steve Alexander • 612-673-4553