Hector Communications Corporation Comments On Recent Schedule 13D Filings By Phillip Goldstein and Andrew Dakos
November 14 2005 - 12:01PM
PR Newswire (US)
HECTOR, Minn., Nov. 14 /PRNewswire-FirstCall/ -- Hector
Communications Corporation (AMEX:HCT) today commented on recent
Schedule 13D SEC filings by Phillip Goldstein and Andrew Dakos. On
September 9, 2005, Phillip Goldstein and Andrew Dakos, filing as a
group under Section 13(d) of the Securities Act of 1934 (the
"Goldstein Dakos Group"), filed an amended Schedule 13D that
included a letter to Hector's Board of Directors offering to
purchase all outstanding shares of HCC common stock for $30.25 per
share in cash, subject only to "due diligence and satisfactory
customary conditions." As of September 9, 2005, the Goldstein Dakos
Group reported collective ownership of 420,400 shares or 11.0
percent of Hector's outstanding common stock. After reviewing the
September 9, 2005 13D filing, Hector, through its investment
banker, Legg Mason Wood Walker, Inc., asked Mr. Goldstein to
explain why the Goldstein Dakos Group was not an "interested
shareholder" under the Minnesota Business Combination Act (Minn.
Stat. ss. 302A.673) because the group held more than 10% of all
outstanding Hector shares. Legg Mason further advised Mr. Goldstein
that if the Goldstein Dakos Group were an "interested shareholder,"
it could not participate in an acquisition of Hector because it had
failed to secure approval from Hector's Board of Directors prior to
the date it became the beneficial owner of more than 10% of Hector
stock. Under the Minnesota Business Combination Act, failure to
secure such prior approval precludes an interested shareholder from
engaging in any business combination for a period of four years
after the date an interested shareholder acquires 10% ownership.
Legg Mason indicated that Hector wanted the Goldstein Dakos Group
to review the applicable provisions of this law and advise Hector
why the Business Combination Act would not preclude the Group's
ability to consummate the acquisition proposed in its September 9,
2005 letter. To date, neither the Company nor its investment banker
has received any response from the Goldstein Dakos Group as to why
the Minnesota Business Combination Act does not apply to its
proposal. In an amended Schedule 13D dated November 8, 2005, the
Goldstein Dakos Group reported it had purchased an additional
32,600 shares of Hector stock, and included another letter to the
Hector Board. While in its letter the Goldstein Dakos group
referred to its earlier $30.25 per share offer, it failed to advise
the Board how the offer could proceed in light of the Business
Combination Act. In its November 8 letter the Goldstein Dakos Group
noted the Company's recent public comments on published reports
that Midwest Wireless Holdings may be sold and the significance of
a sale to Hector, if a sale occurred. The Goldstein Dakos Group
asserted that any reinvestment of the proceeds without a
shareholder vote would be a breach of the Board's fiduciary duty.
The Company has advised Mr. Goldstein that these comments were
premature given the fact that that no sale of Midwest Wireless has
been announced and, assuming a sale does go forward, Hector does
not currently know what the amount and the form of consideration
available to Hector would be. As the Company has indicated in its
recent press release, Hector Communications Corporation will
continue to assess all strategic options as it awaits the results
of the Midwest Wireless sale's process. In its November 8, 2005
letter, the Goldstein Dakos Group also asserted that Hector is an
investment company under the Investment Company Act of 1940. Based
upon its review of applicable law and advise of counsel to date,
the Company does not believe it is an investment company.
DATASOURCE: Hector Communications Corporation CONTACT: Curtis A.
Sampson, Chairman and Chief Executive Officer, or Steven H.
Sjogren, President, or Paul N. Hanson, Vice President and
Treasurer, all of Hector Communications Corporation,
+1-320-848-6611
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