One of the stranger developments in the US computer market in recent weeks has been the buy-out offer made by Fortune Systems’ executive vice-president Robert Davis and international president Brooke Pete Taylor for the Belmont, California company’s computer business – and reading between the lines, it is pretty clear that the pair have gone public on their proposal because the board wants to sell they computer business and they would prefer to run it themselves than have it go to a possibly hostile third party. If their bid is successful, they will concentrate on selling multi-user Unix systems – not only Fortune’s existing line but others, bought in – to value-added resellers. Fortune will then be left with its recently-formed Tigera software arm controlled by Fortune chairman, president and chief executive James Campbell. Campbell says that the company is seriously looking at the acquisition offer but is also looking at alternatives. The proposal will be put to the company’s shareholders at the annual meeting in May. But why should the board want to sell? The reason seems to be that Fortune, which has scarcely been profitable for two quarters in succession since it went public in 1983, has racked up $60m in unused tax credits that could be used against future profits if the company could make any, and also has $20m cash in the bank. The board therefore apparently wants to turn the company into an a shell to acquire another business that is moving into profit and apply those tax credits to its earnings. But in its present state, just moving into profit after years of losses, the existing Fortune business looks exactly the kind of company to which the formula should be able to be successfully applied, and the keeness to sell is a massive vote of no confidence in the products.
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