June 16, 1998
Nimbus CD Board Expected To
Vote On $253 Million Bid
By STEPHANE FITCH
Dow Jones Newswires
NEW YORK -- Nimbus CD International Inc.'s (NMBS)
board will decide whether to accept a bid for the company
by early Wednesday, according to people familiar with the
situation.
The Charlottesville, Va., compact-disc maker disclosed
last week that it had entered into talks to sell itself to an
unnamed suitor offering $11.50 a share in cash, or $253
million, plus the assumption of debt. The precise structure
of the bid and the identity of the suitor couldn't be learned.
The $11.50-a-share offer represents a modest premium
for Nimbus' shares, which have been stuck in the 9 to 13
range for more than a year. The stock finished up 3/16, or
1.8%, at 10 3/4 in the last hour of trading Tuesday. Some
113,300 shares changed hands, compared with average
daily volume of 87,600.
Some analysts and a few investors have complained the
bid is too low for Nimbus CD, which they argue is on the
verge of a bull run. Although the company has posted
lackluster single-digit earnings growth since its initial
public offering in 1995, it has taken crucial steps to
become a major manufacturer of DVD software, believed
to be the next big trend in home video.
But shareholders who count the most for Nimbus are
New York investment funds Behrman Capital and
McCown De Leeuw & Co. Those funds acquired
Nimbus in a $100 million leveraged buyout in spring 1995,
orchestrated its $45 million IPO later that year and still
hold almost half of its stock. And they're ready to sell,
people familiar with them said.
A Behrman Capital official declined to comment.
McCown De Leeuw officials weren't immediately
available.
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