PinkRoccade admitted in November that it had been involved in regular discussions with Ordina over a potential business combination, and on October 29, Ordina offered a higher cash amount for the business than Getronics. This was rejected however due to what PinkRoccade called the lack of a strategic fit between the companies, and because it had doubts about the financing of the deal.
A spokesperson for PinkRoccade told ComputerWire that Ordina had offered E350 million ($462 million) in cash for the company, compared to a cash-and-shares deal offered by Getronics, valued at E338 million ($446 million), of which approximately E100 million ($132 million) would be in cash. An agreement in principle was reached with Getronics on November 1.
The fact that Ordina offered more money for PinkRoccade has clearly caused disquiet among the employees and shareholders, and in a statement, PinkRoccade said: This topic led to a great deal of unrest in and around the company, with harmful side-effects. In the interests of the company, the management of PinkRoccade has therefore decided not to…respond to the invitation by Ordina to enter into consultations.
Despite this, Getronics is not prepared to get drawn into a bidding war, having stated that it will not now increase the cash component of its offer.
A merger between Ordina and PinkRoccade would create a far smaller company, focused primarily on the Benelux and UK markets. The business would have a combined workforce of approximately 10,550 people, with revenue of E1.08 billion ($1.43 billion) based on full-year 2003 sales, of which E345.4 million ($455.9 million) would be from Ordina, and the remaining E739 million ($975.5 million) from PinkRoccade.
A combination with Getronics meanwhile, would create a far larger business, with greater geographic coverage. It would bring together some 29,000 people and generate pro forma 2003 revenue of E3.41 billion ($4.5 billion), of which E2.67 billion ($3.52 billion) would be from Getronics and E739 million ($975.5 million) from PinkRoccade.
This debacle could threaten to derail the PinkRoccade/Getronics merger, and cause even more friction within the company. After all, PinkRoccade’s management wants the tie-up with Getronics, while its shareholders clearly want a merger with Ordina.
