Whatever you say about IBM Corp chairman Louis Gerstner, Machiavellian is the last adjective that springs to mind: since it appears that the company could have done a deal to buy the Lotus Development Corp applications – spreadsheet, word processor, database – as long ago as last August, the company could have saved a very significant portion of its shareholders’ cash by buying the applications – $800m sounds about the right price for about $620m of profitable sales in a declining business, leaving Lotus as a loss-making $350m-a-year company with $800m in the bank: if it had then entered intensive negotiations for the joint venture on Notes that Lotus was prepared to consider – keeping Lotus top brass so busy in talks that it did not have time to spend much of the $800m – and then launched a bid for the shrunken Lotus after the talks broke down, there is no way that it would have had to pay $2,500m to win it – and it would also have been able efficitively to knock most of the $800m off the final price, since it would bave been buying back its own cash.
Word is that Louis Gerstner would be prepared to pay a higher price in cash and paper for Lotus Development Corp than the $3,300m cash now on offer if it can persuade the Lotus board into recommending the higher offer to its shareholders.
Top officials from Novell Inc and Intuit Inc met to discuss Novell’s use of Intuit’s Quicken financial software, but a Novell executive declined comment on whether a Novell acquisition of Intuit was considered: use of Quicken would make sense for Novell, said Novell executive vice-president Jeffrey Waxman in an interview broadcast on the Dow Jones Investor Network, adding that given the choice of a product in the personal finance market, Novell would favour Intuit’s software; he said Novell chief Robert Frankenberg has talked with Intuit chairman Scott Cook and that the talks were positive and cordial.
Creative Technology Ltd has added Sound Blaster 32, a professional personal computer sound board that it says combines Sound Blaster audio with Creative’s wave-table synthesis technology and up to 32-note polyphony: the product is claimed to provide genuine instrument sounds and digital effects processing for entertainment titles, business presentations and music applications, and it will be made available this month at $170.
Teledanmark A/S and Stet SpA were the two highest bidders at around $1,500m for the 27% stake on offer in Czech telephone monopoly SPT Telecom as according to Mlada Fronta Dnes: quoting London banking sources, the paper said that the TeleDanmark and Stet bids topped those from the other three consortia – Ameritech Corp with Deutsche Telekom AG , France Telecom with Bell Atlantic Corp were said to be next in price, each bidding around $1,250m; Teledanmark described the reports to Reuter as pure guesswork, adding all I can say now is that our bid is very competitive, and according to Reuter sources, Tele Danmark’s bid for the Czech phone company is less than $1,500m.
Cray Electronics Holdings Plc’s shares are still fading and yesterday they fell 8.5 pence or 13% to 55.5 pence: the suggestion that Racal Electronics Plc – once seen as a Cray target – will turn the tables and bid for Cray is still doing the rounds in the market.
San Antonio-based SBC Communications Inc’s Southwestern Bell Telephone Co in St Louis plans to allocate more than $300m over five years in a campaign to make Integrated Services Digital Network available throughout its five-state operating territory: the Kansas City market will have an advanced ISDN network in place this summer, followed by other markets throughout Kansas, Arkansas, Missouri, Oklahoma and Texas over the next 12 months, and it will also upgrade its ISDN networks in the Dallas-Fort Worth, San Antonio and Houston markets; the company notes it already has advanced ISDN infrastructures in Austin and in St Louis.
VLSI Technology Inc will be taking a second-quarter pre-tax charge of $19.4m for damages against it in
a patent infringement dispute with Texas Instruments Inc: it still intends to challenge the verdict.
Cable & Wireless Plc announced that its talks with Deutsche Telekom AG under which it might have acquired half of the German’s 25% stake in Indonesian satellite services company PT Satelit Palapa Indonesia, Satelinto, had stalled on price.
Microsoft Corp has licensed Santa Clara-based Mediamatics Inc’s software-based MPEG playback technology on undisclosed terms, and says it will it in future versions of Windows after the release of Windows95.
News Corp Ltd’s Fox Broadcasting is teaming up with would-be investor MCI Communications Inc to develop a new on-line service and will try to beat Microsoft Corp and NBC to market with it, Communications Daily reports: Rupert Murdoch told the paper that within a couple of weeks a very, very big joint venture with MCI with our on-line services which will be way out there operating ahead of Microsoft and NBC will be announced; the deal apparently isn’t final, but Murdoch said it probably will be announced before Fox affiliates meeting in Los Angeles starting on June 22.
Southborough, Massachusetts-based Chipcom Corp may be best friends with IBM Corp, but it is also good friends with Digital Equipment Corp and the latter has enhanced its existing agreement with Chipcom and will now collaborate on marketing, sales and education in Europe, Africa and the Middle East: DEC will integrate Chipcom’s ONcore Switching System, ONline System Concentrator, Galactica Network Switching Hub, StarBridge Turbo Switch and ONsemble StackSystem product families, plus the company’s ONdemand NCS network management software and related applications for customers.
Writing itself out of the Computergram script, Lucas Industries Plc has now signed its facilities management agreement with El Segundo-based Computer Sciences Corp, saying it is potentially worth $500m over 10 years: it is also selling its Lucas (formerly Metier) Management Systems and its management consultancy arms to Computer Sciences, and up to 1,200 Lucas people will also move across; the information technology assets to be transferred as part of the deal have an estimated book value of some ú25m.
The Public IP Exchange Ltd unit of Cambridge-based Unipalm Group Plc has gone to Harris Computer Systems Corp for an Internet firewall, choosing the Fort Lauderdale, Florida company’s CyberGuard Firewall to offer to Internet subscribers in the UK and elsewhere in Europe.
Wry and cruel comment on the IBM Corp bid for Lotus Development Corp from Roger McNamee, general partner of Integrated Capital Partners: on how Microsoft Corp would view the bid, he told the New York Times at Microsoft, they have to be relieved that Lotus went to IBM instead of somebody else or remaining independent – after all, the same guys who bungled OS/2 now have Notes.
Pity the IBM Corp-Siemens AG-Toshiba Corp 26nS access time 256M-bit dynamic memory chip (CI No 2,679) is three years away (does it have to be?) because the company has a problem with its PowerPC-based machines: the problem is that although RISC outperforms complex in price-performance terms, it needs about double the memory to give optimum performance and the insatiable demand for memory chips is keeping prices high, which cancels out the potential advantage – but if IBM could mobilise 26nS 256M parts in the desktops, the machines would really start to motor and only its partners in the effort would have a comparable advantage unless they chose to offer the chips on the merchant market from Day One.
Borland International Inc will add Visual to the dBase name with the next releases, Visual dBase 5.5 and the Visual dBase Compiler, which it says will provide the transition path for database developers and their clients planning to upgrade from Windows 3.1 to Windows95; Visual dBase 5.5 is described as the only second-generation object-oriented Xbase, enabling users to create and re-use objects without programming; Borlan
d says it will announce pricing later this month.
The two-way pressure is strong, but as usual, employee and protectionist pressure is likely to win out over the needs of industry: Germany should liberalise its market for telephone services before the current deadline of January 1998, Siemens AG chairman Heinrich von Pierer told Die Welt; Siemens has been the main supplier of equipment to Deutsche Telekom, which is facing privatisation as well as the ending of its telephony monopoly.
Chile’s Empresa Nacional de Telecomunicaciones SA, Entel has signed up CS First Boston Inc to sell up to a 25% stake in the formerly government-owned long-distance phone company: ever since Chile took the final steps to deregulate its $1,000m-a-year market last November, eight companies offering everything from long-distance lines to cellular phones have been locked in a profit-killing price war, Dow Jones & Co reports – in long-distance, where Entel previously held a monopoly. at the height of competition last December, one contender offered rates of 2 cents a minute to call anywhere in the world and another gave out 14 minutes free with each international call; rates are now settling at a level around 60% lower than before deregulation; Entel now hopes its troubles can be turned to advantage in other Latin American markets that have yet to be fully deregulated; it has small operations to offer private phone systems in Argentina, Colombia, Ecuador and three Central American countries, seen as attractive come-ons to an international partner.
