Conference 7.286::digital

5307.0. "Investors seek vote on sale of DEC" by MUCCS1::PIETERSON (Alpha AXP Hardware Support ) Wed May 28 1997 07:36

 Digital - Investors seek vote on sale of DEC
	{The Boston Globe, 26-May-97, p. A14}
   Digital shareholders have filed proposals that include asking the
 money-losing computer company to consider putting itself up for sale.
   One proposal calls for the hiring of an investment bank to consider selling
 the nation's fourth-largest computer maker and the second involves removing an
 anti-takeover defense from Digital's charter, said company spokesman Dan
 Kaferle.  Both proposals were submitted by individual investors.
   "They are advisors resolutions asking the board to consider those
 proposals," Kaferle said.  "They aren't binding."
   He declined to comment on the proposals.
   The proposals come just days after some of the company's largest investors
 made plans to meet next month to consider ways to boost Digital's stock.
   Shares rose 1 1/8 to 36 on Friday, for a decline of 31% in the past 12
 months.  The Maynard-based company has posted losses in five of the past six
 fiscal years.
   The resolutions, which were first reported in the New York Times, were filed
 in recent weeks, Kaferle said.  They will be voted on later this year at the
 company's annual meeting.
   The proposals come from the Investors Rights Association of America, which
 is headed by William Steiner.  Steiner, of Great Neck, New York, is known for
 filing shareholder proposals involving companies whose stock has declined.
 He typically owns a few hundred shares of the companies he targets with his
 proposals.
   Digital's current management, led by Robert Palmer, who was named chief
 executive in 1992, has had its chance, Steiner said.  It's time for new blood,
 he said, drawing a comparison with the stock of IBM, which closed Friday at
 173 3/8, up from about 50 when chief executive Louis Gerstner took over in
 April 1993.
   "Five years is enough time for a company to get on its way," Steiner said.
 "We're not interested in excuses anymore."
   This isn't the first time Steiner has targeted Digital.  In 1995, he
 supported a non-binding resolution at the company's meeting to change the
 structure of its board, in which only a few members come up for re-election
 each year.
   Many investor activists prefer boards in which all the members have to be
 re-elected each year because that makes it easier to replace them in one swoop
 and bring in new management.  Steiner said he plans to push the issue again
 this year.
   Another of Steiner's proposals involves Digital' stockholders rights plan,
 enacted in 1989.  The plan involves the distribution of one common stock
 purchase right for each share of stock held under certain circumstances.  When
 triggered, a shareholder would be allowed to buy Digital stock with a value
 that is twice the exercise price of the purchase right.
   On June 18, institutional shareholders that own as much as 40% of Digital's
 stock will meet in New York at a gathering sponsored by Providence Capital
 Inc.  The meeting will serve as a forum on the future of Digital, which
 declined to send a representative, said Herbert Denton, the president of
 Providence, last week.
   Denton has said that Digital stock trades at a "deep discount" to its
 breakup value.
   Separately, Digital said it's planning a global brand campaign designed to
 enhance its image as a one-stop provider of computer services and equipment
 for corporations.
   The campaign will be led by Lucia Quinn, one of the company's marketing
 executives, said Kaferle.