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SCH confirms Compel stand-off

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It's all working out rather nicely for Specialist Computer Holdings, the UK's second biggest reseller group.

Today it announced that it had 'no intention' of making an offer to take over Compel, the UK's third biggest reseller group.

This is not so very meaningful considering the get-out clauses.

"SCH reserves its right to review this situation if:

1. The Board of Compel agrees to recommend an offer by SCH;

2. A third party announces a firm intention to make an offer for Compel;

3. Compel announces it is putting itself up for sale;

4. There is a material change in circumstances."

SCH has a 11 per cent stake in Compel, the UK's third biggest reseller group, accumulated when the latter's share price into freefall following a profit warning in May.

In turn this provoked Computacenter, the UK's biggest reseller group, to launch an informal cash offer in June for Compel, rejected by the Compel board as wholly inadequate.

On October 6, Computacenter withdrew its offer - a profits warning of its own in the summer meant that the company would have had no stomach - or shareholder backing - for a hostile takeover.

This means now that Compel is no longer in play - although continuing profits gloom and low share price means the company is still vulnerable. It cannot be comfortable for it to have SCH, a big rival, as a shareholder.

It looks very comfortable for SCH - the timing for a Compel acquisition looked very poor this year, considering that the privately held company had/ maybe still has its hands full with the integration of Info'Products Europe ( a larger company than SCH) into the group.

It can now return to Compel at its leisure. Maybe next year? ®

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