AST Research Inc is determined to come out as one of the winners in the bitter battle for share in the personal computer market, and yesterday it announced that rather than let the business go in the spin-off of the TE Electronics manufacturing operations, it had made an offer for Tandy Corp’s personal computer manufacturing operations, which had been accepted. The Irvine, California company says that the price envisaged in its letter of intent should not exceed $175m. The Tandy assets to be bought include GRiD Systems Inc, Tandy-GRiD Europe and the computer manufacturing plants in Texas and Scotland. The purchase price will be paid in either cash and three-year promissory notes or all cash, but it expects to pay a significant portion with the three-year notes. Tandy said it expects to take a $70m charge against current quarter figures to cover the shortfall between the price to be paid and the value in its books – it says the sale has the potential to increase operating earnings and provide more cash for debt reduction, retail growth or share buy-backs. The TE Electronics spin-off is now moot, and Tandy says it is likely to sell most of its other manufacturing assets instead. The deal seems to mean that with the Scottish base, AST no longer needs the European plant it had planned.
