Zenith Electronics Corp.`s largest stockholder said Monday that it won`t seek a proxy fight rematch at Zenith`s April 28 annual meeting.
Nycor Inc. of Basking Ridge, N.J., fell far short last year in a bid to win three seats on Zenith`s 10-member board. After Zenith`s 1991 annual meeting, Nycor chief Sal Giordano Jr. called the defeat ”the first round”
and warned Zenith, ”We aren`t going away.”
Nycor hasn`t gone away. It still holds about a 7.6 percent stake in the company and still blames Zenith management for a string of yearly losses from continuing operations dating to 1985. But it seems in no mood to fight.
In a statement Monday, Giordano cited favorable factors this year for Glenview-based Zenith, including its shift of more production to Mexico and an improving consumer electronics market.
”These should promote a turnaround at Zenith without any stockholder initiatives,” said Giordano. He added that current conditions ”offer Zenith a no-excuses opportunity to report a full-year profit for 1992 and avoid management`s replacement or loss of the company`s independence.”
A Zenith spokesman declined to comment, except to dispute Giordano`s description of an improving market for color TV sets. He said TV sales industrywide this year are off to a weak start.
Nycor`s decision comes four days before Friday`s deadline for submitting director nominations for Zenith`s annual meeting.
Giordano and his family control Nycor, a shell company with no operating assets, and Fedders Corp., a Peapack, N.J.-based air conditioning firm.
Nycor, which paid just under $5 a share for its Zenith holdings, might have found it hard to mount a proxy fight when Zenith`s stock price has been relatively strong. On the New York Stock Exchange, Zenith closed Monday at $9.75, off 12 cents. It has traded as low as $5.12 in the last 52 weeks.
The Giordanos also might have had to defend their record at Fedders.
Cool summer weather has resulted in excess inventory and two years of losses for Fedders. The company is predicting a loss for the first six months of fiscal 1992, but expects to be profitable for the fiscal year that ends in August.
Last December Fedders reached agreement with its banks on an amended credit facility, curing some prior defaults. It also required a $40 million short-term loan from Nycor.
