Gateway board dismisses eMachines founder's buy-back offer
Not good for shareholders
Gateway's board of directors has rejected eMachines' founder Lap Shun Hui's offer to buy its retail business for $450m, claiming the offer is "not in the best interest of shareholders".
Why it's not, they didn't say, but the board maintained it had arrived at this conclusion after carefully pondering the matter and taking soundings from its financial and legal advisors.
Hui made the offer in early August, but the board did not respond until last week, simply to say it was considering the unsolicited offer.
Hui founded eMachines in 1998 to offer US buyers low-cost PCs. Gateway acquired the company in March 2004. Formed as a manufacturer-retailer, Gateway later shut down its bricks'n'mortar stores, choosing instead to sell online and through partners. It currently maintains eMachines as a separate brand.
Last month, Gateway, the third largest US PC builder, reported a Q2 loss of $7.7m on revenues of $919m. ®