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Coastcast Hires Bear Stearns for Buyout Advice

May 16, 2000|From Times staff and wire reports

Coastcast Corp., a Rancho Dominguez maker of cast-metal golf club heads and medical tools, said Monday it hired Bear, Stearns & Co. to advise it on acquisition offers.

Coastcast Chief Executive Hans Buehler said the company had received inquiries about a possible acquisition but no specific buyout proposal was being considered. The company declined to identify the possible suitors.

Likely bidders include other cast-metal firms or private investors who could use Coastcast's strong cash flow to finance a leveraged buyout, said Brett Hendrickson, director of research at B. Riley & Co., a Los Angeles brokerage.

Shares of Coastcast rose $1, or 5.5%, to close at $19 on the New York Stock Exchange. The announcement came after the close of regular U.S. trading.

The company reported income from continuing operations of $9.5 million on sales of $120.4 million last year.

In 1998, Buehler, 67, and other Coastcast executives drew fire from Hillsborough, Calif., private investor Jonathan Vannini, who owns about 9% of the company's shares. Vannini accused them of accepting large salaries and stock option grants at shareholder expense and took them to court to pressure them to hold a special shareholders' meeting.

Coastcast reached a settlement with Vannini later that year in which Buehler accepted a salary cut of nearly 20%, according to filings with the Securities and Exchange Commission.

Buehler was not available for comment Monday.

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Bloomberg News was used in compiling this report.

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