Elcom rejects buyers
Rejects unattractive proposals
Elcom International, the US-owned corporate reseller, has abandoned its attempts to find a cash-rich buyer. Directors have voted to continue as a “standalone” company, and have parted company with investment bank Salomon Smith Barney, hired last year to find a suitable new parent company. Proposed deals were not “in the best interests of its stockholders”, according to Elcom. Elcom last year hired the investment bank, because its share price was too low to enable it to expand in Europe through acquisition. Last week, the company circumvented the ownership problem, by setting up an international European alliance of dealerships, under the leadership of UK MD Phil Garnar. Elcom said it was not in any substantive talks with any prospective buyer, but it would conduct discussions “when appropriate”. It is contractually bound to pay commission to Salomon Smith Barney, if any transaction takes place “with certain parties” over the next year. Elcom is keen to shore up its share price by initiating research coverage – -currently it does not have a single analyst tracking the company’s performance. The company says revenue trends in the US and UK are “favourable” with service revenues increasing. It is also making good progress with operational efficiencies, it says. ®
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