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TSR Inc. rejects takeover offer from NYC investor Zeff Capital

The exterior of TSR, a recruiting firm based

The exterior of TSR, a recruiting firm based in Hauppauge, Wednesday, May 31, 2017. Credit: Steve Pfost

TSR Inc., a Hauppauge-based company providing information-technology staffers to businesses, has rejected a takeover bid by a Manhattan investment firm.

Publicly traded TSR said in a government filing Tuesday that it would “not pursue” the proposal by Zeff Capital LP to acquire TSR’s common stock for $6.15 per share in cash.

“It is in the best interests of the company and its stockholders to remain independent,” TSR said.

TSR shares fell 25 cents, or 3.3 percent, to close at $7.35 Wednesday on the Nasdaq Stock Market.

TSR shares had climbed after TSR disclosed Zeff’s bid in a filing on May 18. The bid of $6.15 per share was a premium of about 27 percent over TSR’s closing price on May 17.

The shares are up more than 90 percent in the past 12 months.

Zeff owned 140,627, or 7.2 percent, of TSR’s common stock as of May 18, the fund said in a Securities and Exchange Commission filing.

As of March 9, the largest stockholder in TSR was Joseph F. Hughes, the company’s founder, chairman, chief executive, president and treasurer, with 44 percent of shares, according to Bloomberg News.

TSR, with offices in Hauppauge, Manhattan, and Edison, New Jersey, serves the utility, insurance, publishing, pharmaceutical and financial services industries.

“We have no comment at this time,” a spokesman for TSR said in response to a telephone call.

Daniel Zeff, president of Zeff Capital, did not respond to a request for comment.

Zeff describes itself on its website as a “highly selective value investment fund” that buys assets in the “least efficient markets.”

In the quarter ended Feb. 28, TSR reported revenue increased to $15.4 million from $15.1 million in the prior year’s quarter, but its net loss widened to $68,000, or 3 cents per share, from $24,000, or a penny per share, in the 2016 period.

The company said that the average number of consultants on billing with customers increased to 394 from 357 in the prior year’s quarter, but computer programmers declined to 328 from 357 in the 2016 quarter.

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