Tug-of-war looms as Spescom rivals Didata for Plessey
RIVAL ACQUISITION BIDS
SPESCOM Electronics has emerged as a rival to technology group Dimension Data in what could become a tug-of-war bid to gain control of telecommunications group Plessey.
Plessey announced on Friday it had received a rival, and at this stage unspecified, bid to Didata's R1.6-billion offer for its business.
Meanwhile, Spescom said it would make a formal offer on or before August 7, and both Plessey and Spescom warned their shareholders to exercise caution.
Didata announced on Monday that Dimension Data Telecommunications and black investment group WorldWide African Investment Holdings would establish a Plessey joint venture in which WorldWide would hold 51% and Didata 49%.
The consortium said it intended to retain the high-growth BSW-Data and Solutions businesses and dispose of Plessey's Asian interests and manufacturing and defence business, which were not core to Didata's operations, to a Plessey management consortium.
Plessey SA MD Llew Jones said on Friday he was informed of Spescom's intention to make a formal offer, but he had no further details. Jones said he had seen Didata's offer, and due diligence was taking place, as was consultation with advisers on whether the Didata offer was considered fair and reasonable.
He said it seemed from the proposal that Didata would dispose of certain assets, and he had heard that Spescom would not. Spescom is already operating in the same area as some of the businesses which Didata would sell off, "so it makes sense that what is not interesting to Didata is interesting to Spescom".
Spescom executive chairman Tony Farah could not be reached for comment, but he told Reuters that Spescom's bid was based on buying the company in its entirety. He would not comment on the bid amount.
Farah said the merger would create synergies. "The reason we are doing it is because I believe it is good for both Spescom and Plessey shareholders. We have a lot of synergies, and I think culturally there is a good fit between the two," Farah told Reuters.
Jones, when asked if he felt under siege, said: "Not really, although it would be nice to be left alone to get on with the group's plans." But it is still very much business as usual.
In fact, Plessey announced on Friday that its 74%-owned subsidiary Plessey Asia Pacific had signed a joint venture agreement with Telstra Corporation, the partially privatised Australian telecommunications company.
The 70/30 alliance, PlesTel, has bought the small business systems of Telstra for $A105-million, comprising R50-million cash from Plessey and A$10-million from Plessey Asia Pacific, with the remainder funded by borrowings.
The deal gives PlesTel licensing rights to the Telstra Commander brand names and also marketing rights to Telstra's network products as a premium dealer.
Plessey Asia Pacific chairman John Temple said the Australian company had been set up to create a base for business development and acquisitions in both Australia and Asia, and the deal fitted in with this strategy.
PlesTel will focus on the business communications systems market, providing key telephone systems, as well as PABXs and business communications solutions, targeting the computer telephony integration market.
Didata directors could not be reached for comment on Friday, and Jones said he had not spoken to Didata since the Spescom offer was made.