Netro Corporation (Nasdaq:NTRO) on July 19 may have succumbed to pressure from a determined dissident shareholder, C. Robert Coates, when announcing a self-tender offer and stock repurchase plan. The moves will be led by Goldman Sachs.

Netro's board said the company would repurchase up to 23 million shares, or about 38% of the company's outstanding common stock, under a Dutch auction tender offer at a purchase price per share of between $3.50 and $4.00. The price represents a premium of 42% to 62% above Netro's closing level last week.

Shareholders applauded, sending Netro stock up 30% to $3.1.

The tender offer will commence July 19, 2002, Netro said, and will expire at 5:00 p.m. New York City time on August 16, 2002, unless extended. The board also agreed to open-market repurchases, at least 10 business days after the tender offer is completed.

The company may have been goaded into the move by disgruntled shareholder C. Robert Coates, whose pressure on Netro included launching a website called www.baddirectors.com. His publication, which went live on July 10, features Netro's directors, who are inducted the "Directors' Hall of Shame". Coates named directors are Gideon Ben-Efraim, Irwin Federman, Thomas Baruch, Richard Moley, Sanford Robertson, Lewis Chakrin and Shirley Young. "They just don't care", the website announces.

"Regardless of their credentials at making money for themselves, these directors have imposed huge costs on Netro's shareholders," Coates sniped in a press release. "We think that Netro's stock would immediately trade at much higher prices if the board removed a poison pill that they sneaked past their shareholders in last year's election," he added.

The Wall Street Journal wrote about the website in its Technology Journal section on page B6 under the heading "Gripe Site II."

"The directors and CEO have shown zero ability to use the shareholder's money to make a profit, even in the best of times in the telecom business," Coates charged in his release. "For that reason, the directors need to immediately announce a self tender offer for 30,000,000 shares at $3.50 or more a share followed by $100,000,000 of open market purchases."

Which the company did, by coincidence or otherwise, after agreeing to meet with Coates to hear his opinions.

Netro CEO Gideon Ben Efraim, who starred in several of Coates' press releases, commented that the program was initiated after "thorough review of Netro's AirStar and Angel product lines and their respective markets".

"While the Board has periodically reviewed alternative uses of the Company's cash resources, such as possible acquisitions, it has not identified any current acquisition opportunities that it believes are available on attractive terms," Ben Efraim added, saying that the move is an effective way to return excess cash to shareholders, because of the premium over the company's share price.

The company believes that Netro's market sector, while experiencing a cyclical downturn, has long-term potential and that both AirStar and Angel are well-positioned to benefit when the it recovers, Ben Efraim stated.

Coates, who owns 2.4 million Netro shares, has plenty of ideas for improving the company's return to investors. His campaign to urge the company to better performance for investors was waged through letters and later press releases. His chief gripe was that the directors seemed indifferent to the declining investment of shareholders.

He even tried to gain a seat on the company's board, spending hundreds of thousands of dollars on that campaign. But he failed to garner the necessary votes at a shareholders assembly in May.