Santa Fe adversary buys more stock

Thursday, March 18, 1999 | 12:10 p.m.

Hudson Bay, a New York investment firm, and general partner David Lesser now control 2.8 million preferred Santa Fe shares, or 31.5 percent of the outstanding shares, according to a Securities and Exchange Commission filing this week. Hudson Bay also owns bonds in a Santa Fe subsidiary, Pioneer Finance Corp., that is in bankruptcy.

Because Santa Fe has missed dividend payments for two years, preferred shareholders have the right to elect two special company directors at the company's April 30 annual meeting. Hudson Bay has nominated a number of directors for election to the board. Hudson Bay is also trying to force Santa Fe Gaming into bankruptcy via an involuntary bankruptcy petition.

Hudson Bay has been buying preferred Santa Fe stock since late last year. Hudson Bay's SEC filings say the company is buying stock for investment purposes, but Santa Fe officials believe Hudson Bay is attempting a takeover of the company.

Whatever the reason for Hudson Bay's buying activity, it appears to be affecting the value of the preferred stock. Preferred shares closed up 19 cents Wednesday at 88 cents. The stock traded as low as 13 cents a share in December.