Aetrium shareholders embroiled in proxy fight

  • Article by: PATRICK KENNEDY , Star Tribune
  • Updated: September 26, 2012 - 7:28 PM

A group seeks to replace the board of the small company.

A proxy battle has been launched for control of tiny Aetrium Inc., the North St. Paul-based maker of equipment used by the semiconductor industry.

The company said Wednesday that it will hold a special shareholder meeting on Nov. 26 in response demands of a shareholder group that together owns 17 percent of Aetrium's shares. In a statement, Aetrium president and CEO Joseph Levesque said: "This shareholder group proposes to remove all current members of our board and replace them with its own slate of directors."

The shareholder group calling itself the Concerned Aetrium Shareholders (CAS) formed on Aug. 9 because they believed their investment was undervalued, according to filings with the Securities and Exchange Commission. Members of the group including investors Jeffrey Eberwein, Galen Vetter and Richard Coleman had a telephone meeting with Levesque and other Aetrium officials on Aug. 21 in which they discussed their "intention to seek to join the board of directors, study the business and take other, yet-to-be-determined, actions to maximize shareholder value."

After subsequent exchanges with management the group requested a special shareholders meeting.

Levesque said in the release that "the nominees named by the group have no operational experience in the semiconductor industry or the semiconductor equipment industry." Calls to Aetrium were not returned Wednesday.

Eberwein , a former portfolio manager with Soros Fund Management and spokesman for the shareholder group, told the Star Tribune in an interview: "Our group brings a wealth of experience to Aetrium's board including proven money makers and turnaround specialists." Eberwein said his group includes three former CEOs of public companies.

Aetrium, which has six members on its board of directors including two company insiders, made a compromise offer to the shareholder group, offering a single seat on the board. That offer was not accepted.

"We believe that Aetrium's performance has been so poor that we believed more substantive change was required," Eberwein said. Instead, CAS made a counterproposal suggesting a 50/50 split of the board. Eberwein said that offer was denied.

Through the six months ended June 30, Aetrium's revenues were $3.9 million, down 25 percent compared to the same period a year ago. The company recorded a loss of $1.1 million.

The group promises to move quickly but prudently. "We will explore all alternatives as quickly as we can," Eberwein said. Aetrium's stock closed Wednesday at 95 cents per share.

Patrick Kennedy • 612-673-7926

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