Ah, for the days of the corporate raider.
. They'd buy up 5% or so of a company and make all sorts of big demands: Sell the company! Break it up! Sometimes, they'd be such pains in the butt that the company would just buy them out at a higher price than they paid just to make them go away. A bit of "greenmail," as it came to be known.
That era is over, but Jay Bernstein remembers.
You probably don't know Bernstein, but
does. Over the past several months, Bernstein, on behalf of the eponymous
, has been putting out dramatic press releases saying that he has a sizable stake in Possis and that he thinks the company should be taken over.
Come to think of it, you may not know Possis either. It's a podunk, unprofitable Minneapolis medical device company that's been around for over a decade and has extremely modest sales of something called the
system, which is meant to flush out blood clots. It hasn't really caught on much, and the company does a lot of private placements to keep itself going. It's done OK with that strategy and has a market cap of around $160 million.
For several months, Bernstein, with the help of
, has been stamping his feet and holding his breath till he turns blue. Unfortunately, poor Bernstein can't figure out how much he owns of Possis. And the
Securities and Exchange Commission
isn't helping. No group has to file its stake with the agency until it reaches 5%, and Bernstein's group doesn't appear to be there -- or maybe it is.
A Bernstein press release Thursday read in part: "Jay Bernstein, who heads an independent investor group in Arizona, disclosed today that his group has increased its ownership of Possis Medical in recent weeks. While a final tally of its percentage ownership of Possis Medical was not immediately available, Mr. Bernstein indicated that it may well exceed the reporting requirement." As with South African elections and "how many jelly beans are in the jar?" contests, counting shares outstanding is hard and takes time.
Rest assured that when he figures it out, he'll let us know with an SEC filing. "If I own more than 5%, I will. If I own less, I won't," he says in an interview. "The less interference by the government in everybody's life, the better."
Possis didn't return a call seeking comment. But in late May, the company put out a release that disavowed Bernstein, stating that "any actions being taken by Jay Bernstein, a major shareholder of Possis Medical Inc., are being taken independently and without the knowledge or involvement of the company."
In April, the powerful Bernstein Group issued a release saying it was "considering a tender offer for Possis Medical at a substantial premium to its current market price." In late May, Bernstein said he "intends to open discussions with potential buyers" of the company. Just this Thursday, he said he's gotten some bites. He "acknowledged that multiple parties have expressed an interest in the potential acquisition of Possis," his release read. These pronouncements have been dutifully spit out onto the wire services, giving them a veneer of officialdom.
Bernstein says he's shopping the company around. "I took it upon myself and spoke to various medical device companies at the appropriate levels," he says. And he has the ability to sell the company, he declares. "I have spoken to other very large shareholders. If we acted in concert, we could swing a vote for acquisition of the company. We have more than 50%."
Bernstein also displays his financial prognostication acumen -- not just negotiating talent -- in his releases. The Bernstein Group press release from Thursday said "reliable sources" indicate that the company "will exceed analysts' revenue estimates for the current quarter." In the interview, Bernstein says, "The sources of that are via people inside the company."
So, who is this Grand Canyon
? Jay Bernstein himself turns out to be the former chief executive of an Arizona chain of
convenience stores that was bought by
in 1994. The "group" consists of his father and a few friends, he said.
"It's just a small group of people. It's not registered. It's not a hedge fund. It's not a fund. John buys what he wants. Frank buys what he wants. They don't have to buy." But in this case, "we all acted together because we saw the same value."
But Bernstein doesn't like his tactics being labeled promotional. He says the Possis' Angiojet has a sales potential topping $1 billion, citing the company's annual report: "Take a look at that before you slap me down for being a promoter. I'm far from being a promoter."
Perhaps even more absurd is that in this market, such declarations actually appear to work. The stock finished up 8% Thursday, or 7/8, to 11 5/8.