Move Part of Apparent Bid for Control : Shareholder Raises Stake in Certron

In an apparent bid for control of Certron Corp., the company’s principal shareholder has raised his stake in the Anaheim magnetic tape manufacturer to 32% and demanded that Edward Gamson be be removed as chairman and chief executive.

“I feel the company can become more profitable and that the position of chief executive should be strengthened,” said Marshall I. Kass, president of Louart Corp., a Los Angeles investment firm and Certron’s largest stockholder.

Certron manufactures audiocassette tapes and computer floppy disks and distributes videocassettes. It also manufactures and assembles electronics for Xerox Corp. and other customers at a plant in Mexicali.

At a meeting with Gamson on Nov. 4, Kass asked Gamson to step down as chairman and chief executive and suggested that he replace Gamson. Kass proposed that Gamson, Certron’s founder, remain with the firm as supervisor of sales operations for the Mexicali facility.

Details of the meeting were disclosed in a Louart filing with the Securities and Exchange Commission this week.

According to the filing, Gamson told Kass during their meeting that he didn’t believe that he could be required to take a different job with the company under his current employment contract.

Gamson did not return phone calls seeking comment Friday.

Certron is “a good company with a good future,” Kass said, but “over the years, the company has not done that great.”

During the first 9 months of its 1989 fiscal year, Certron’s earnings declined to $122,000 from $205,000, on flat sales of $20.3 million. The company reported a $54,000 loss for its latest quarter ended July 31.

The company blamed the third-quarter loss on increased videocassette sales, which required increased marketing expenses because of competitive market conditions. Another factor in the loss, the company said, was the bankruptcy of a major retail customer, which resulted in bad debt and increased interest costs.

Asked how he would boost Certron’s profits if he were chief executive, Kass offered no specific plans.

“I’m not prepared to say I’ll do this or do that,” Kass said. He said that because he is not an officer of the company, he doesn’t have the information necessary to say how he would run the company differently.

Kass said he has no intention of merging Certron with Louart or taking the publicly held firm private.

Louart began accumulating its interest in Certron in March, 1985. Last May, Kass said he had no plans to take over the Anaheim firm.

Since May, Louart has bought an additional 243,000 shares of Certron at an average cost of $2.06 per share, or nearly $503,000. Louart now owns 985,700 of Certron’s 3 million shares outstanding.

Because of its increased investment, Louart has asked Certron management to increase Louart’s seats on the Certron board from two to four and to expand the number of directors from seven to nine.

Kass and his son, Michael, joined the Certron board in March. Kass has proposed that the two new directors be another son, Jonathan Kass, and a daughter, Susan K. Rubien.

Louart was founded in 1931 and has been controlled by the Kass family since 1938. The company was in the garment manufacturing business until about 1960, when it was converted to an investment company with holdings in stocks and real estate, Kass said.