Detection Systems-Ultrak Board Battle Heats Up
Detection Systems Inc. (DS) has responded to Ultrak Inc.‘s proxy filing with the Securities and Exchange Commission (SEC) asking shareholders to approve its choices for DS’ board of directors. If successful, the proxy would give Ultrak, DS’ top shareholder with a 21-percent ownership stake, control of DS’ board and possibly pave the way for DS to be sold to a German conglomerate. DS has issued a letter to its shareholders stating that the company’s future is bright, the DS board only acts in the best interests of the shareholders and that Ultrak is motivated by its own interests.
In the document, Karl Kostusiak, DS president and CEO, states, “We firmly believe this contest is motivated by Ultrak’s own needs and is against your best interests. Ultrak is burdened with negative cash flow and decreasing profitability. Ultrak has sought our technology, attempted to hire our personnel, and now wants to auction your company at a time when its market value is depressed but its future is very promising. We strongly recommend against a ‘fire sale’ of Detection Systems just to meet Ultrak’s financial needs.” DS’ annual meeting is scheduled for August.
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