DataMirror ups Idion stake ahead of offer`s close

By Iain Scott for Idion Technology Holdings

Johannesburg, 27 May 2002

DataMirror, whose offer to buy Idion`s shares closes tomorrow, has increased its shareholding to more than 35%.

DataMirror, the Canadian group that launched a hostile takeover bid for JSE-listed Idion Technology Holdings in March, last week increased its shareholding in Idion to 35.1% from about 34%.

"The 35% threshold is an important milestone for DataMirror as, outside of a bid situation, the Securities Regulation Code on Takeovers and Mergers would define 35% as 'control`, which would require a mandatory offer to minority shareholders," DataMirror says.

However, Idion CEO Nicolaas Vlok says a 35% does not constitute control of Idion, since more than 54% of shareholders have already rejected DataMirror`s final offer of 180c per Idion share.

"DataMirror should not make statements which are irrelevant to this hostile bid to confuse shareholders," he adds.

Idion announced earlier this month that it had rejected DataMirror`s final offer after its independent advisor, PricewaterhouseCoopers, found that the offer was below Idion`s fair and reasonable value.

Idion management, family and friends, as well as institutional investor Metropolitan, account for about 54% of the Idion shares. They have submitted written undertakings not to sell their shares unless PricewaterhouseCoopers deems an offer to be fair and reasonable.

DataMirror CEO Nigel Stokes says indications from leading software analysts are that the second quarter in North American software markets will be tough, with the outlook for the rest of the year uncertain.

"The time has come to work together and reach critical mass in a competitive market. They simply cannot ignore us anymore," he adds.

Vlok says Idion management has so far seen no synergies or advantage in a merger of the two businesses. In spite of its 35% shareholding, DataMirror will enjoy the same rights as any other minority shareholder, he adds.

"It is now clear that this is a final desperate merger effort by DataMirror. Apart from the fact that merger talks are not possible during a hostile takeover bid, Idion`s management are not convinced that such talks would have any value for Idion`s shareholders.

"As we see it, the value in such discussions would be in one direction only. DataMirror needs Idion. Idion does not need DataMirror."