Jacobs-controlled IPI now a big Clarent holder too
Neal St. Anthony
Star Tribune
Published Sep 6 2001
IPI Inc., a small public company controlled by Irwin Jacobs and
some close associates, acquired 5.1 percent of the stock of
Clarent Corp. a few weeks before the California provider of
Internet telephone systems said it may have to restate its
financial results.
Jacobs holds a large personal stake in Clarent, and the shares
that IPI bought had been beneficially owned by Jacobs under a
purchase-option agreement with a brokerage firm that has
expired, according to a recent regulatory filing by IPI.
Eden Prairie-based IPI is best known as the parent company of
InstiPrint, the quick-printer franchisor, but also has been used
by Jacobs as an investment vehicle.
In an interview Wednesday, Jacobs said he and other IPI board
members decided to purchase nearly 2 million shares in a
private transaction with CS First Boston for about $6 per
share. At that level, the shares traded near the value of
Clarent's stated cash on hand, representing what appeared to
be a good value, he said.
Jacobs said that he has retained the 5 percent-plus stake in
Clarent he directly owns and that IPI did not buy his shares.
In hindsight, the purchase was poorly timed. Clarent shares fell
to $5.37 per share this week and trading was halted by the
Nasdaq Stock Market after the company announced that it had
suspended several executives and that revenue for the first two
quarters of the year may have been overstated.
'Clarent had a 48-minute conference call [with analysts and
investors] on July 19 and they basically told everybody how
great things were going,' Jacobs said. 'IPI has been making
investments, and it was very conservative for IPI to pay $6 for
$6 of cash alone [on Clarent's balance sheet].
'No one anticipated their recent announcement. This is not an
AremisSoft, no question in my mind. I don't think it's
anywhere near the problem that is AremisSoft.'
Jacobs, Carl Pohlad and close associates acquired more than 15
percent of the stock of AremisSoft, a Cyprus-rooted software
company, at prices up to $18 per share. The shares now trade
on the so-called pink sheets for under $1 as a result of
allegations of fraud by senior executives that federal
investigators are pursuing.
Clarent has fallen from a price of $56 to $5.37 during the past
year.
IPI shares closed Wednesday at $4.70, off 1 percent. Jacobs and
several longtime partners own or control about two-thirds of
IPI stock.
The company sold its stake in Conseco, another Jacobs
favorite, at an average price of $14.54 per share this summer
and realized proceeds of $20.7 million, or $4.26 per share.
Conseco has traded around $8 per share lately.
-- Neal St. Anthony is at nstanthony@startribune.com .
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