Financial Daily from THE HINDU group of publications
Sunday, Nov 23, 2003
Financial Daily from THE HINDU group of publications Sunday, Nov 23, 2003 |
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Telecommunications Info-Tech - Mergers & Acquisitions FLAG, Pivotal call off talks; path looks clear for Reliance Our Bureau
Mumbai , Nov. 22 FLAG Telecom and Pivotal Private Equity have mutually called off discussions, only three days after it was announced that Pivotal had made a better offer than Reliance Infocomm's for FLAG, leaving the path fairly clear for Reliance, if everything else goes well. FLAG made an announcement on November 19 that the US-based private equity company called Pivotal Private Equity has offered to acquire FLAG Telecom for a consideration of $220 million, higher than Reliance's offer of $207 million. This worked out to $110 per share, versus Reliance's $95.61 per share. Reliance had signed a `Plan of Amalgamation' with FLAG a month ago for acquisition of the latter, in the main consisting of 50,000 km of undersea telecommunications cable. On Saturday, FLAG announced that its representatives met with representatives of Pivotal on November 21, to discuss the latter's proposal. After taking into account, among other things, the agreement and plan of amalgamation with Reliance Gateway Net Ltd (subsidiary of Reliance Infocomm), and after Pivotal also taking into account, "among other things, its defined investment parameters," both mutually determined not to pursue further discussions with respect to a transaction between the two parties, said an announcement from FLAG, made to the Securities and Exchange Commission. Three days ago, FLAG also sent a notice to shareholders for a special general meeting on December 22 to consider and vote on the proposed amalgamation between the company and Gateway Net Bermuda Ltd, a company organised under the laws of Bermuda and a directly wholly-owned subsidiary of Reliance Gateway Net Ltd. The approval of the amalgamation requires the affirmative vote of 75 per cent of the votes cast at the special meeting.
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