Feeds

Insight walks away from Action takeover

Share price plummets as long awaited deal falls through

  • alert
  • submit to reddit

Internet Security Threat Report 2014

Insight Enterprises has scrapped its plans to buy Action Computer Supplies, causing Action's share price to plunge 60 per cent. The US company today said it had ended the agreement to buy the Middlesex-based reseller "in light of a deterioration in Action's operating results". In a statement to the stock exchange, it also blamed "the difficult near term trading conditions to which Action is exposed, particularly with the Millennium year end still to come". Action was told on Friday that the Insight board would not be able to recommend the deal to the company's shareholders. As reported here, Action then asked for its shares to be suspended pending a further announcement. As part of the proposed deal, Insight had the right to stop proceedings if the merger was not completed by 31 December 1999. On Friday, Insight stated it did not want to renegotiate or extend the agreement. Action today also announced an expected drop in pre-tax profit before exceptionals to £2.2 million, from £7.1 million last year, in its preliminary results for the year ended 31 August 1999. In the unaudited estimate, sales were forecast to increase to £276.6 million, from £249.6 million. Action said net exceptional items totalled £300,000, made up of £800,000 of costs from the proposed buy-out and £500,000 of recovered tax. Henry Lewis, Action chairman, stated that the board of Action was disappointed with the decision, saying Insight had acted ignored the long-term benefits of the deal. "In our opinion, the effects of recent short term weakness in the United Kingdom IT market should not have outweighed the strategic benefits of the merger." According to Lewis, spending from Action's biggest customers were continuing to fall below historic levels, reflecting companies' Y2K planning. But he said he expected "a gradual recovery during the first quarter of the New Year, with a consequent return to satisfactory trading for the company as a whole". Action saw Web sales continue to rise, up 37 per cent to £26 million for the year to August. It also said it would be launching a new Web site this month to encourage customers to use ecommerce. Action's shares dropped 112.5 pence to 65 pence in the first one and a half hours of this morning's trading, after being restored to the listing at 7.55 am. In July, they peaked at over 300 pence. ®

Top 5 reasons to deploy VMware with Tegile

More from The Register

next story
Facebook pays INFINITELY MORE UK corp tax than in 2012
Thanks for the £3k, Zuck. Doh! you're IN CREDIT. Guess not
Facebook, Apple: LADIES! Why not FREEZE your EGGS? It's on the company!
No biological clockwatching when you work in Silicon Valley
Happiness economics is bollocks. Oh, UK.gov just adopted it? Er ...
Opportunity doesn't knock; it costs us instead
Sysadmin with EBOLA? Gartner's issued advice to debug your biz
Start hoarding cleaning supplies, analyst firm says, and assume your team will scatter
YARR! Pirates walk the plank: DMCA magnets sink in Google results
Spaffing copyrighted stuff over the web? No search ranking for you
In the next four weeks, 100 people will decide the future of the web
While America tucks into Thanksgiving turkey, the world will be taking over the net
Microsoft EU warns: If you have ties to the US, Feds can get your data
European corps can't afford to get complacent while American Big Biz battles Uncle Sam
prev story

Whitepapers

Cloud and hybrid-cloud data protection for VMware
Learn how quick and easy it is to configure backups and perform restores for VMware environments.
A strategic approach to identity relationship management
ForgeRock commissioned Forrester to evaluate companies’ IAM practices and requirements when it comes to customer-facing scenarios versus employee-facing ones.
High Performance for All
While HPC is not new, it has traditionally been seen as a specialist area – is it now geared up to meet more mainstream requirements?
Three 1TB solid state scorchers up for grabs
Big SSDs can be expensive but think big and think free because you could be the lucky winner of one of three 1TB Samsung SSD 840 EVO drives that we’re giving away worth over £300 apiece.
Security for virtualized datacentres
Legacy security solutions are inefficient due to the architectural differences between physical and virtual environments.