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Biotech / Medical : ESCMF makes equipment to remove varicose veins! -- Ignore unavailable to you. Want to Upgrade?

To: Jim Caputo who wrote (110)	3/16/1999 11:31:00 AM
From: Kalman	Read Replies (1) \| Respond to of 119

I hope this is helpful ESC boardroom battle as Genger tries takeover By Joel Nassie, Ha'aretz Correspondent A power struggle among major share holders appears to be shaping up over domination of ESC Medical Systems, a NASDAQ-traded company specializing in surgical technology. Arie Genger who owns 8.6 percent of the shares of the company has announced that he is cooperating with Barnard Gottstein, who owns 6.7 percent of ESC, to demand a change in three directors, in a move that would give them control of the company's board. Genger, a director of Haifa Chemicals, had a controlling interest in the company Laser Industries which merged with ESC in 1997 when ESC was selling at a peak price of $40 a share. Since then the price of the share has plummeted by 85 percent, selling last week at about $5. In a letter to ESC's chief executive officer, Shimon Eckhouse, Genger and Gottstein said that the current directors did not have the necessary expertise to assure investors that the company will reach its potential and said they want to reshuffle the boardroom to help restructure the company and raise investor confidence. They proposed changing two of the existing directors with their own candidates and adding a third director of their choice. The ESC board currently has eight directors, three of them named by the management. If the suggestion of Genger and Gottstein is adopted, they would control five out of nine votes on the board. The letter did not suggest changing the company's management, or specifically mention ousting Eckhouse, but it is likely that if the two rebels manage to change the composition of the board, they will seek the dismissal of Eckhouse, who founded ESC in 1992 with a product that uses a laser beam to remove varicose veins. Genger and Gottstein have set a deadline of March 22 for a response to their demands, threatening to call a special shareholders meeting if the response is not positive. ESC's management is opposed to the proposed changes, and on Friday received support from the board with an announcement saying it supported the current management of the company. However, Eckhouse and the rest of the company's top management together control 15 percent of ESC's shares, extremely close to Genger and Gottstein's joint holding of 15.3 percent, and this would mean a major battle if an extraordinary shareholders' meeting is called. The decisive votes are likely to come from U.S. mutual funds that own ESC. With the announcement of Genger and Gottstein's letter, ESC shares rose 12 percent to $5.75 but trading was not particularly active with some 475,000 shares trading hands. © copyright 1999 Ha'aretz. All Rights Reserved