Interwave’s auditors said in its latest SEC filing that its recurring losses raise substantial doubt about its ability to continue as a going concern, and the company was in no condition to resist the reduced offer. As part of the new deal, Alvarion will provide additional interim financing for Interwave.
The agreement was greeted with considerable relief by the stock market and Interwave’s shares rose 57.32% to $3.87 on the news.
Alvarion abandoned its original bid because of what it saw as Interwave’s worsening financial prospects. Alvarion CEO Zvi Slonimsky said it anticipated reduced cash generation by Interwave, with increased cash outlay by Alvarion, and therefore reduced the consideration it would pay. He said the deal is expected to turn accretive in the third quarter of 2005.
Interwave hopes to call a meeting of shareholders to approve the revised offer sometime in the next six to eight weeks.
