Eric Krasnoff, the chief executive of Pall Corp., one of Long Island's largest companies, said he will retire next year after disclosing that he and the company's former general counsel are pursuing a "personal relationship."
The development could make the Port Washington-based company, which specializes in filtration systems, ripe as a takeover target, according to a Credit Suisse analyst.
"We believe Eric Krasnoff's retirement is a catalyst for the company to merge or become acquired," Hamzah Mazari wrote in a note to clients, a Reuters report said. "The majority of Pall's closest competitors have been acquired by larger companies."
Pall shares spiked more than 10 percent Monday on the report.
The company said in a Friday news release that Krasnoff, 58, who is also board chairman, will resign in March 2012, on his 60th birthday.
Pall left open the possibility that Krasnoff might depart earlier if the company selects successors to his two positions. The Pall board plans to launch a search to fill the jobs.
"The announcement follows the notice to the board by Mr. Krasnoff and the company's general counsel, Sandra Marino, on Jan. 10, 2011, that they intended to pursue a personal relationship," the release said.
The board accepted the resignation of Marino, 41, and brought in outside counsel for an inquiry after learning of the relationship.
The inquiry "determined that the relationship did not have any impact on Pall's operating or financial results and that no company assets were misused or misreported," Pall said.
Krasnoff and Marino did not respond Monday to calls requesting comment.
Effective immediately, Robert G. Kuhbach has been appointed as senior vice president, general counsel and corporate secretary pending a search for Marino's replacement.
Krasnoff is the son of Abraham Krasnoff, the former company chief executive, who helped build the company after joining as an accountant in 1951. Abraham Krasnoff, who retired in the early 1990s, died in 2007.
According to Manhattan Supreme Court records, a contested matrimonial filing was recorded on Nov. 10 between Krasnoff and his wife. The couple, who are separated, have two daughters.
In December, Krasnoff exercised company stock options for nearly $8.5 million in two sets of transactions.
With a market capitalization of $5.78 billion, Pall had $2.4 billion in revenue for the fiscal year ending July 31. In that period, its net income available to holders of its common stock was $241.25 million.
Pall closed Monday at $55.41, up $6.75, or nearly 14 percent.