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Action bags £15m supply deal

Which won't hurt any takeover talks

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Action plc has scored a major supply deal with WS Atkins valued at £12-to-£15 million for calendar year 2001.

The deal has been announced amid rumours that Action, the UK's biggest mail-order reseller, is in the frame to be bought by Insight Enterprises, the US direct marketing IT reseller.

The Financial Mail on Sunday reported on 19 August that the deal was all signed and would be announced within two weeks. Action has merely confirmed that it is in "advanced bid talks" with an unnamed company.

The WS Atkins deal is to run over two years and Action will supply HP kit - servers, desktops, laptops and peripherals - and Peregrine software tools to the company, a supplier of technologically-based consultancy and support.

In 1999, Insight cancelled plans to buy Action, following a rapid deterioration in trading reported by the UK business during the due diligence period. Since then Action has been up for sale, but not at any price. In August 2000 Action rejected an offer which "undervalued" the business.

The fact that Action is prepared to climb into bed again with Insight shows the company does not want to risk getting past its sell-by date. For the six months to 28 February 2001 Action reported it had returned to profit, posting interim pre-tax profits £400,000 on sales of £137 million. ®

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