So who's going to buy Energis?
Rack of bidders lined up
Energis, the ailing alternative telco, has a rack of potential buyers lined, according to the weekend papers. The Sunday Telegraph names Worldcom as a bidder, while the FT reports that distress purchase/ private buyout firms Carlye Group, Kohlberg Kravis &Roberts, Providence Capital and Apax Partners have all tabled bids.
The FT also outs Peter Wilkinson, the guy who set up Planet Online - which he sold to Energis - and the founder of Sports Online, a company sold for the ludicrously large sum of £301m to BSkyB in April 2000 - i.e- a couple of months afterthe height of dotcom madness. He's supposed to be locked in with advisors UBS this weekend prepping an offer.
Wilkinson is the major force behind InTechnology, an enterprise data storage reseller/distie which is quoted on the stock market. He is on the look-out for cheap data hosting centres, according to the FT, which says he tabled an offer worth 17p a share recently for Telecity. The offer was rejected, the paper reports.
Energis' former parent company and still major shareholder, the National Grid, is unwilling to pump any more money into the business, which is not exactly a vote of confidence.
But Energis is, in the UK at least, a real business with real customers - as witnessed by the interest from trade and financial bidders. However, it carries a rack of debt on its books, accumulated through an ill-judged £1bn European buying spree (hindsight is not such a wonderful thing).
The company has gone into rapid retrenchment mode, last month cutting or selling off the European ops and 400 jobs. This follows 350 job cuts announced last November. But the move is too little, too late to meet its payment schedule to debt bondholders, who are owed £565m in total. They need squaring off, and this is perhaps easier said than done, especially if there are only low-ball bids on the table.
Energis, among other things, provides the Web hosting infrastructure for Freeserve, the UK's biggest ISP. This contract is almost certainly in its dying days; fortunately, the company is to provide a similar service for AOL in the UK. ®