Health warning placed on Olicom

Selling some or all of the company?

In May, we said Olicom was prey, waiting to be eaten by a larger company. Its dismemberment could come even sooner than we thought. The Danish networking equipment vendor says it is talking to various parties with a view to building "co-operative relationships". At the same time, it is negotiating to sell different technologies, to aforementioned various parties. The outcome will drive the company into operating loss and materially affect Olicom's balance sheet (for the worse, we can infer). So it has postponed reporting Q2 US dollar results until the end of August and it has asked the Copenhagen Stock Exchange to put it on the Surveillance List. In effect this is a health warning for dealings in its shares, and it suggests that Olicom does not anticipate its share rising, once the smoke clears over who it is actually negotiating with. Olicom names no names, but Cabletron is surely in the frame: it signed a deal to resell Olicom's Token Ring technology less than two months ago. And on grounds of geography, it would not be entirely surprising if Olicom were talking to Swedish telecoms giant Ericcson, too. ®

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