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STC’s UKP168m OFFER SHOULD LAND COMPUTER CONSOLES

Computer Consoles For Sale – Cunningham: Prize for STC? ran our lead headline on August 11 (CI No 991): yes indeed. After we closed for press Monday, STC Plc announced an agreed $168.4m bid for the Waltham, Massachusetts computer-based directory inquiries and fault-tolerant Unix office automation systems builder. STC is offering $12.80 a share – from its internal resources against a pre-bid price of $8 even: the shares closed in New York at $12.25, indicating that a rival bid is not expected. STC has acceptances from chairman John Cunningham for his 10%, and directors and officers speaking for another 2% – and in case any hostile bid does come in, STC has been given an option to buy unissued shares representing another 15%. STC is particularly excited about the new Audio Response system and other intelligent network developments at Computer Consoles, but the company’s business – $9.7m net on turnover of $127m for the nine months to September – is split about equally between systems for phone companies and commercial Unix systems, and the latter side is of keen interest to STC’s ICL, which for the first time will have a serious marketing partner for its products in the US – and prospects for expanding its offerings by for example linking its point-of-sale terminals to Computer Consoles’ fault-tolerant transaction processing Unix machines. One minor conflict that needs sorting out is over Computer Consoles’ forthcoming proprietary RISC processor: ICL has committed to using Sun Microsystems’ Sparc in future Unix machines, but is not yet far enough down that route not to switch horses. When John Cunningham talked to the Wall Street Journal in August, he envisaged staying with the firm for another four or five years: a major question is whether – with nearly $17m in his pocket – he will be willing to stay to lead an ICL drive into the US market.

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