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October 12, 1995


By CBR Staff Writer

Those hazarding that Microsoft Corp was the mystery suitor for Unipalm Group Plc were probably the warmest, because the company yesterday revealed itself to be Fairfax, Virginia-based UUNet Technologies Inc, the Internet access provider in which Microsoft took a substantial minority stake ahead of its flotation earlier this year; it is the official Internet access provider to the Microsoft Network. The price is indeed 450 pence a share, valuing the company at $154m – which ain’t bad for a business that turned over only the equivalent of $27.8m in the year to April. But UUNet would almost certainly have had to pay a lot more had Unipalm been a US company of the same size. A possible downside is that the offer is for shares worth #4.50, and the shares are traded only on Nasdaq, which suggests that small shareholders that don’t want the hassle of holding shares in a company not quoted in London should sell their shares in the market. Unipalm is billed as the largest provider of Internet services in Europe, and the largest Internet access provider in the UK. Each ordinary share of Unipalm is to be exchanged for between 0.1543 and 0.2163 of a UUNet share depending on the price in the market when the offer goes unconditional. It looks like a done deal, because UUNet has already received firm commitments to accept the offer from Unipalm shareholders representing some 49% of the shares, but UUNet is making the offer conditional on it getting 90% acceptances, so that it can acquire the shares of any dissident holders compulsorily, and it is quite possible that there will be a band of shareholders that will be aware that the price is none too generous on the basis of American valuations of companies like Unipalm. UUNet has appointed Goldman Sachs International to make the exchange offer and it was advised in the US by Hambrecht & Quist LLC.

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