VA Linux cuts cash component from Andover acquisition
Due to 'tax concerns', apparently
VA Linux Systems is to pay Slashdot owner Andover.net entirely in stock, junking the previously agreed cash element. The deal, struck in February, originally called for a $60 million cash payment to be made to Andover's owners.
They are now going to get VA stock instead - stock brought low by Wall Street's downer on hi-tech stocks, brought about largely by the Microsoft anti-trust verdict. (VA's stock price is currently worth less than a third of its value when the deal was announced). VA will now still swap 0.425 of its own shares for each Andover share, as was orginally planned, but it won't first have to knock $60 million off the total.
And the reason for the change? According to Bloomberg, the companies won't say, but the official release notes "tax concerns". Despite the pruned share price, the deal still makes sense for VA, which is trying to build up a community of kit-buying friendly users. Plus there's a lot of money to be made out of advertising, which may not be core, but it's important when you're main source of income isn't yet paying the rent. ®