KPN to buy Getronics
30 July 2007 | 3138 views | 0
Dutch telecoms group KPN has unveiled a surprise management-backed EUR766 million bid for IT services firm Getronics.
The bid of EUR6.25 per share is a 23% premium to Getronics's closing price on Friday of EUR5.10. KPN says it will also make offers for Getronics' unsubordinated convertible bonds.
News of the bid pushed Getronics shares up over 20% to EUR6.21 in morning trading on Monday.
The Dutch IT services provider has been at the centre of takeover speculation for months and recently ended takeover talks with an un-named US company.
In a joint statement the companies say Getronics' supervisory and management boards "unanimously support the intended offer".
Getronics CEO Klaas Wagenaar says the deal "will provide instant financial stability to our business and a strong platform to further strengthen our position as a successful provider in converged ICT services in our key geographies".
KPN says the proposed acquisition will reinforce its ICT strategy transform its business from a provider of communication service to an end-to-end provider of ICT services.
News of the deal comes as Getronics reports a consolidated net loss of EUR108 million for the first half of the year, compared to a profit of EUR22 million a year ago. The group's total revenue fell two per cent to EUR1.28 billion, compared to EUR1.31 billion a year ago.
The net loss includes a EUR50 million impairment charge related to its North American business - which will also impact its full year results - as well as a EUR25 million impairment charge in the UK. The results also include a EUR13 million impairment of goodwill in Iberia as a result of a transaction with Tecnocom. Depending on the final outcome of the earn-out, this impairment could increase to EUR28 million.
Furthermore, the results include EUR10 million loss on the sale of subsidiaries following the divestment of 70% of its Japan operations and transactions in China/Hong Kong.