Telecom Eireann is stepping up efforts to find a partner, Reuter reports from Dublin: it will shortly receive a mandate from the Irish government allowing it to pursue negotiations on forming a strategic alliance with an overseas company: Cable & Wireless Plc is known and British Telecommunications Plc is believed to be interested, but Singapore Telecommunications Ltd, Unisource BV and US West Inc have also been mentioned as possibilities; British Telecom and Unisource are favoured by the Communications Workers’ Union which represents more than 9,000 of the 12,000 employees.
As reports emerged that Jim Manzi has already begun talks with Louis Gerstner, professional Wall Street arbitrageurs believe IBM Corp may be prepared to go to $70 a share in order to win an agreed takeover.
Lotus Development Corp has been actively soliciting a white knight to rescue it from IBM Corp, Wall Street investment bankers told the Wall Street Journal, and an industry executive said that Lotus has approached several potential suitors in the last 48 hours, including AT&T Corp – not very likely to be interested, Hewlett-Packard Co and even Intel Corp, which sounds a very long shot indeed.
Notes developer Ray Ozzie reportedly has a contract with Lotus Development Corp that requires him to stay until Notes 5 is released – and Notes 4 is not due until the autumn, even if Lotus is acquired: he says he’s willing to stay if IBM Corp can negotiate a deal friendly and agreeable to both sides.
IBM Corp is still hoping to get Lotus Development Corp to recommend an offer, but it is also solicting shareholder votes on a motion to oust the board and replace it with its own nominees: if it wins 51% of the votes, it would install its own board and rescind the poison pill.
It is very unlikely that the European Commission would block an acquisition nodded through by US competition authorities, but as we understand it, since Lotus Development Corp does more than $250m of business in Europe, Brussels has given itself the right to approve the IBM Corp takeover or otherwise, and already people are suggesting that companies such as Cap Gemini Sogeti SA, which builds custom Notes applications, and SAP AG, which would face tougher competition if IBM put Notes on the AS/400, would be hurt by the acquisition.
Lotus Development Corp’s book – net asset – value is only $500m, so IBM Corp could have to write off as much as $2,800m or $5 a share on its $3,300m bid: it has indicated that it would take the entire hit against a sinqle quarter’s figures, but Dan Mandresh of Merrill Lynch & Co is sanguine, telling Dow Jones & Co a write-off is a one-time historical event and adding Who cares?
IBM Corp’s thinking may have been hopelessly behind the times when it came to the desktop personal computer, but it is not making the same mistake with the Internet: according to Associated Press, public relations experts say they’ve never seen any company match IBM’s blitz on the World Wide Web to promote a corporate buy-out, putting up Lou Gerstner’s message to Jim Manzi, his internal memo to IBM employees, a press release and audio clips of Gerstner explaining the offer as soon as the bid was announced, and later in the day including a transcript of Gerstner’s 45-minute news conference and photographs from it: It’s a good place for us to find out what’s going on, to tell you the truth, said one Lotus Development Corp employee; Lotus has its own Web page, which contains a bare four-paragraph statement from Manzi about the proposed bid for Lotus.
But some say that IBM Corp may come to curse the World Wide Web in a couple of years if it succeeds in its bid for Lotus Development Corp, because new tools are being developed so fast for the Web that it could soon offer as much functionality as Notes – and it’s effectively free; Lotus itself recognised the danger and in a barnstorming session decided to try to embrace the Web with Notes, not fight it.
Is it about to put itself up for sale? Dallas, Texa
s-based banking software specialist Hogan Systems Inc says it has signed Morgan Stanley Co Inc as its financial adviser for the purpose of evaluating strategic alternatives to maximise shareholder value, and says it has nothing more to say on the matter.
3DO Co is rumoured to be negotiating with competitors such as Sega Enterprises Ltd and Philips Electronics NV to license some of its next-generation games technology for use in their own new players, or else to have them market machines to its forthcoming PowerPC 602-based M2 games machine standard, according to Dow Jones & Co.
Shares of Broderbund Software Inc jumped more than 10% on Wednesday in part on speculation the company could be in play, but a company spokesman said the software developer is not for sale – Are we shopping Broderbund? No, and that’s not a ‘no comment’ it told Reuter.
The authorities are said to be investigating the striking $3.25 jump in Lotus Development Corp’s share price to $32.50 on Friday on suspicion that there might have been some insider trading going on ahead of IBM Corp’s hostile tender.
Bill Gates confirmed to the Wall Street Journal the speculation that he’d be delighted to see Lotus Development Corp go to IBM Corp, saying he doesn’t think the combination makes sense: I just don’t think hardware companies can manage software companies – IBM’s sort of proof of that, he said, citing the company’s software disappointments including OS/2 and OfficeVision; software development required nimble management and a small organisational structure – Our efforts to work with IBM on software definitely come to mind as one of the more painful experiences we’ve had; if IBM were to buy more software companies with its $10,500m cash, Gates suggested I think that would be a positive development for us; he believes Microsoft Exchange will be tough competition and that Notes has the highest market share it will ever have, making it rather a strange time to move in on Lotus.
J Presper Eckert, co-inventor of the Eniac Electronic Numerical Integrator and Computer died last Saturday in Bryn Mawr, Pennsylvania at 76: he began working with John Mauchly on Eniac in 1943, and they completed what many regard as the first general purpose digital computer in 1946; they started the Eckert-Mauchly Computer Corp and in 1950, Remington Rand Co acquired the company and changed the name to the Univac Division of Remington Rand; Remington Rand merged with Sperry Corp in 1955 to form Sperry Rand and Eckert was a Sperry executive when it was eaten up by Burroughs Corp and became Unisys Corp.
Journalists not surprisingly expect to swan past the queuing crowds and straight into exhibitions – especially if they have an invitation to visit one of the companies exhibiting, but the jobsworths on the door at London’s Olympia don’t quite see it that way, and even the fast track process took 10 or 15 minutes at EIS 95 this week: however the security appears to be very much one way, because when we finally got to Keenan Technologies Inc’s stand, we were told they were very sorry but they couldn’t run the demonstration because somebody had walked out with their server.
