21st > February > 1999 Archive

The Register breaking news

LG, Hyundai go to the wire on DRAM merger

Surprise, surprise. Hyundai and LG Electronics have failed to meet their self- imposed Feb 20 deadline for agreeing a price for LG’s DRAM business. Now a six–strong group of arbitrators will come up with a fair price for LG’s semiconductor assets. IT will report back on February 28, enabling the deal to conclude on March 7, according to an unnamed panel member, quoted in the Korean Herald. The two companies say they will abide by the panel's decision. LG Electronics wants $3.4 billion for its assets. while Hyundai does not want to pay more than $900 million. It is in the interest of respective shareholders that LG gets the best price for its assets, while Hyundai pays as little as it can get away with. But this gap is ridiculous. The Korean government should have imposed an either- or clause on the negotiations. There is little love lost between the two companies, and LG resents the forced disposal of its DRAM business, under the Korean Government-imposed "realignment" of Chaebol operations. More sense would have been got out of the two companies if they had known that the panel would plump for either LG’s price or Hyundai. A “fair price” could factor in more than LG’s net asset valuation. But it is difficult to estimate the worth of LG withdrawal from the endemic over-capacity of the DRAM industry. We suspect that Hyundai’s valuation is the more realistic of the two -- never mind the book value of LG’s DRAM assets. There is not exactly a buyers market for DRAM plants right now… witness Siemens’ failure to find a buyer for its modern plant on Tyneside. Hyundai faces a huge bill for post-merger consolidation and it will find it very difficult to retain the combined market share held with LG pre-merger. LG uses different manufacturing technology, so it will take time for Hyundai to reap economies of scale. And, given Hyundai’s union-unfriendly reputation, the company faces tough times ahead with LG-inherited staff. ®
Drew Cullen, 21 Feb 1999
The Register breaking news

Game denies Dixons bid approach

Game PLC boss Paul Lloyd-Roach is denying industry scuttlebutt that the retail chain received an offer for the company from Dixons. Speaking to the UK edition of games trade magazine MCV, he said: "People are always saying that we're about to be sold, but it just isn't the case. Dixons hasn't ever approached us." Usually, this sort of information is retailed through the Regulatory News Service, the London Stock Exchange newswire, that ensures that everyone can get share-sensitive news at the same time -- for a price. But then non-bid = non-story, right? Except that MCV appears to have latched onto something here. Bid or no bid, Game would be a perfect target for Dixons. Dixons is the UK’s biggest consumer electronics and PC retailer, but it is underweight in the entertainment software market. Game occupies exactly the market space that Dixons wants for @jakarta, its new high street retail format dedicated to the games/Internet market. At present, there are a measly 3 @jakarta stores. Dixons will also peddle product through @jakarta on its extraordinarily successful FreeServe Internet service. By buying Game, Dixons could massively accelerate the @jakarta roll-out. Game is the UK’s second biggest dedicated computer games retailer, behind Electronics Boutique. But it has experienced growing pains lately. On January 14, shares in Game slumped 38 per cent to 100.5p, after the company issued a profits warning. It blamed weak Christmas trading on product shortages, and later than scheduled opening of new stores, against a background of booming games software sales. Shares, currently at 101.5p, shows the company has much to do to recover investment sentiment. ®
Drew Cullen, 21 Feb 1999
The Register breaking news

Caldera case could cost Microsoft $1.5bn

MS on Trial Microsoft could be liable to damages of $1.5 billion in the antitrust case brought by Caldera over Microsoft's alleged anti-competitive actions towards DR-DOS. Jim Jardine, a lawyer acting for Microsoft, used this hitherto undisclosed damages estimate by an expert witness for Caldera to support Microsoft's request for another continuance (delay) of 120 days. It is hardly surprising that Microsoft is seeking a delay in the Caldera case, which is being heard in the District Court in Salt Lake City -- in view of the Washington trial, the Sun case, the Bristol case and sundry other actions. But what happened was beyond Microsoft's wildest dreams -- it was allowed a six-month delay to 17 January 2000, because Judge Dee Benson has a number of criminal trials in his diary and, by virtue of the Speedy Trial Act, must hear these first. The judge agreed with Microsoft that it was reasonable to grant some delay because Microsoft's Motion for dismissal would not be fully heard until May. Stephen Hill for Caldera argued that the case should not be delayed beyond August, noting that the cost of the litigation was increased by the delay. Although the 7 June trial date was supposed to have been set in stone, and resulted from a number of earlier delays that Microsoft had won with procedural manoeuvring, the January 2000 date is now regarded as unmovable. It was decided that five court days will be allowed in April and May to hear the chopped-up dismissal Motion from Microsoft. Caldera has until the end of March to produce its detailed reply, which will involve considerable work for the legal consortium acting for Caldera. As we suggested in our earlier report, there is indeed concern that Microsoft was laying the foundation for an appeal, hoping to find the appellate court more sympathetic to ruling against antitrust cases with what amounts to judge-made law, rather than Congress-made law (and ironically using notions from the law of equity that derive from English law). Last year the company divided itself into Caldera Systems, focusing on Linux, and Caldera Thin Clients, where developers based in Andover, UK include some of the original DR-DOS developers. If Caldera wins a considerable sum (and it is not limited to $1.5 billion), it could catapult Caldera into major software developer league. Ray Noorda, the former Novell CEO who provided the start-up funds for Caldera, would have the double satisfaction of seeing his old foe brought to heel, and a gaining a handsome return on his investment. Before that could happen however, Microsoft will no doubt kick and scream its way from court to court with interminable appeals and as many delays as possible. Jardine has already used the argument that Microsoft is busy with the Washington trial, and key Microsoft lawyers would need time to prepare the case. Well, that's Microsoft's problem, and not an argument that should be taken into account by the SLC court. There is already evidence on file that Microsoft has destroyed evidence that should have been disclosed to Caldera, and no doubt appropriate weight will be given to this at trial. Caldera's CEO Bryan Sparks said: "They can run, but they can't hide." US Newspapers apply for document release Meanwhile, the controversy rumbles on over the SLC court's earlier request to seal all court documents. This effectively gags detailed reporting. It must have been quite a revelation to the court to read about the documents in the Washington trial. The court did not have time on Friday, 19 February to deal with an unsealing Motion by the Salt Lake City Tribune, now additionally and significantly supported by the San Jose Mercury News. But this should be heard in the next couple of weeks. The public availability of far more sensitive documents in the Washington trial is likely to influence the decision to unseal documents in the Caldera case. ® Complete Register trial coverage
Graham Lea, 21 Feb 1999
The Register breaking news

K6-III makes Web comeback

Intel Developer Forum AMD has decided to re-instate the K6-III Web page. Here it is, the pesky little blighter. Its re-appearance follows an absence of some days when the powers-that-be at the chip company decided to take it down after our original news story (see AMD Web Stalinists airbrush out K6-III URL) However, if you take a decko at it, you'll see there's more information there than there was before, suggesting it's only a matter of days (day) before AMD decides to go public with the information we first revealed here. AMD is unlikely to have anything like the $300 million Intel will blurb on its Pentium III when it is formally revealed to a waiting world this coming week. ®
Mike Magee, 21 Feb 1999
The Register breaking news

AMD appears to waver over chip security ID

Intel Developer Forum JC, over at JC's pages seems to have winkled out a statement from AMD about its stance on security ID numbers. As far as we at The Register are aware, this is the first time AMD has spoken out about Intel's plans for serial numbers on the Pentium III. On the AMD Web pages, the company says: "We certainly understand the motivation for improving security for web-based transactions and E-commerce. However, we are concerned about the potential of compromising the privacy of the individual. We are evaluating the alternatives for addressing this issue." That indicates to us, at least, that AMD has also had it made clear to it that there needs to be some secure mechanism for transactions across the Web. AMD has been eloquent in its silence on the matter. Meanwhile, an Intel representative here in Palm Springs said that Intel had planned to release the information about the ID number on the Pentium III in the way it did. However, that begs the question whether Intel really understands how it is perceived to the outside world. With its infamous motto Only the Paranoid Survive, it is clear that it should have set out its stall correctly from the start, and switch the chip off by default, as it said it could have done. ®
Mike Magee, 21 Feb 1999