Sun Equities said it has finished buying 1.7 million shares of Computer Memories stock from Intel Corp. for $3.5 million, increasing its stake in the company to 26%.
Sun, which previously owned about 11% of Computer Memories' stock and is now its largest shareholder, also disclosed it is trying to get its own representatives on the company's board of directors. Sun added that it will launch a proxy fight to elect them if it is unable to work out an agreement with Computer Memories' three-member board.
Sun, led by investors Paul and Natalie Koether of Far Hills, N.J., last month arranged to buy the shares from Intel for $2 a share. Computer Memories had until Feb. 14 to buy the shares itself for the same price, but declined to exercise that option.
The agreement between Sun and Intel effectively killed a plan by Computer Memories to merge with DIC, a Burbank cartoon maker, because Sun had opposed the merger.
Computer Memories, once a thriving maker of disk-drive data storage devices for personal computers, is essentially a shell company without any ongoing business. It coverted nearly all of its assets into about $25 million in cash over the last 18 months after IBM dropped it as a supplier in 1985.