Freecom, Oneview fight ends with three dead

Oh to have been a fly on the wall

With numbers-obsessed financial reporting, you'd be forgiven for forgetting it's real people that make the decisions behind the never-ending trail of acquisitions and mergers. With and's planned merger, you weren't allowed to forget.

An announcement made yesterday (24 May) after the London Stock Exchange closed (and labelled "Not for release, publication or distribution in or into the United States, Canada, Australia or Japan") made intriguing reading.

"Following the suspension on 22 May 2000 of trading in the shares of and plc, the directors of both companies make the following statement..." (sounds like the beginning of a clever play based in the City, don't it?). The statement then goes on to explain that both companies had managed to come to an agreement on the terms of their "merger". The offer stands at seven new freecom shares for five existing Oneview shares.

Everything is rosy. But then, with the cold precision that only a plc market announcement can manage, the unravelling starts. "The offer was declared unconditional in all respects on 4 May 2000 and applied to The London Stock Exchange for the cancellation of the listing of the shares of on AIM. As of 3pm, 18 May 2000 [you know something's happening when precise times are brought in], total acceptances amounted to 96.81 per cent [note: not .80 per cent or .82 per cent] of shares."

Presumably it was at almost precisely 3pm that the arguments began. It continues: "In the period since 18 May 2000, a number of differences of opinion between three directors of and the board of have emerged regarding the current status and future direction of the business." Do you get the feeling that the larger "merger partner" dropped a few late bombshells on what they wanted to do with company? It doesn't take long to find out who won.

"Following discussions, Stuart Lawley, Chairman, Steven Salmon, Managing Director, and Stephen Winyard, Sales and Marketing Director, have resigned from the Board of" So that's basically the entire board.

So they're out on their ear? Sadly not for Freecom: "Messrs Lawley, Salmon and Winyard were major shareholders in and under the terms of the merger have become shareholders in the enlarged group."

But don't think for one second that the Freecom boys don't have this under control: "They have agreed to make available a total of nine million shares to These shares will be liquidated over the next twelve months."

And then, just to rub it in: ".and the proceeds used to fund ongoing development of the business, consistent with a revised business plan for" A great use of language you have to admit.

The revised plan, Freecom explains, is to step away from the cash-eating approach of dotcoms with their VC money and "focus on profit generation earlier than previously envisaged". Now, this is a move that we would certainly agree with, especially since and Net Imperative have upped and sank. It sends the right signal to the market and the shareholders - that of: yes, we are a tech stock but we're a wise and careful one, click here for healthy profits.

However, if you are on the board of Freecom, this has very different connotations. It says: "We are going to completely restructure your business plan and there's nothing you can do about it. We will also heavily restrict what money you can spend so you can't even have fun or pretend that it's still your company." This was clearly too much for the men that built the company. Unfortunately the statement doesn't tell us whether they quit or were told to quit by Freecom.

So that leaves only the chief exec and technical director, who presumably came up on the other side of the emotion/finance see-saw. Two non-exec directors also quit. Freecom has put two of its own men in there.

And then, as a final indication that the battle was over and well and truly won, Freecom's board adds a last sentence. "Following the release of this announcement, both and will request to The London Stock Exchange that suspension of trading in their shares be lifted."

And thus another merger was completed. Let's be frank - if it wasn't for the adrenaline rush - victors and losers - high-finance fellows would find some other than acquisitions or mergers to do with their time. ®

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