Yet more billion-dollar IT deals

The proposed $22 billion merger between Lycos and USA Networks, subsidiary Ticketmaster On-line-Citysearch, and the EDS and MCI WorldCom $17.5 billion deal were the biggest international IT happenings last week.

At home, the news of the breakdown of the proposed ATIO/Unihold deal and the strange happenings at Techcom were the most significant highlights. Unihold`s share price could be impacted this week, since the news broke after the market closed on Friday. And I`m sure we haven`t heard the end of the Techcom scenario with respect to both suspected insider trading and its potential acquisition by an unlisted company.

• Cape-based SourceCom Technology Solutions was granted a provisional liquidation order for ISU, in which it has a 51% stake;
• Siltek announced its restructure in order to focus on its two key areas, and allow a management buyout of its non-core businesses by Thinus Grobbelaar, who has now resigned as MD of the Siltek Group;
• Paradigm Interactive Media announced it would be splitting the company into two entities, one an IT group that is intended to be listed separately, and the other in the media business;
• the Connection Group is to re-brand all its retail stores under the name Incredible Connection; and
• Dimension Data has concluded a deal with Lawson Software to create Lawson Software Africa. (SPL, part of DiData, was the local agent for Lawson Software.)

[Local]

Local Cautionary Notices (see attachment)

Other local news included:

• the listings of Cyberhost (very successful) and Explorer (disappointing) in the venture capital sector of the JSE;
• the announcement that Incubator, a new investment company, has been retained to restructure, refocus and list-off the distribution companies of Infinity;
• the news that Spescom will merge its IT and communications division together with its DataFusion subsidiary;
• the announcement of the resignation of Lynne Ogilvy, GM of HP SA; and
• Comparex announced excellent interim results, together with good interim results from PQ Africa.

• we heard that Qualcomm is looking to sell-off its unit that makes equipment for wireless phone networks;
• Adobe is focussing on Corel as an acquisition target;
• ISP Prodigy, whose shares started trading last Thursday, were extremely active and nearly twice their opening levels; and
• the rumours that Sybase, in the medium term, may be looking for a buyer.

[International]

Other international news:

The news that Hyperion Solutions has spun off its decision support arm as a wholly-owned subsidiary, Appsource, the original name of the company which was subsequently bought by Arbor Software and then merged with Hyperion. Additionally, Platinum Technology has won its battle with Platinum Software over the name "Platinum", and so the latter will change its name over the next few months.

We saw excellent figures from Acsys (well back in the black), Ardent Software, Cognizant Technology, DA Consulting Group, Input Software, Mastech, Meta Group, Network Solution (share price down 40% though!), TriQuint Semiconductor, Veramark and Vishay Intertechnology.

Losses came from Celestica, CommNet Cellular, CompuCom Systems, Creative Computers, ENCAD, Enlighten Software Solutions, Entex Information Services, LanOptics, Marcam, Network Computing Devices, Onsale, Security First Technologies, Security One, Segue Software, Verio and Wang Global.

Good numbers were recorded by Antec, Capita Group, CNET, Dassault Systems (back in the black), General Instruments, Group 1 Software, Magic Software (back in the black), MCI WorldCom, PC Connection, Platinum Technology (back in the black), SunGard Data Systems and Unigraphics. Satisfactory results were reported by Amstrad, British Telecom, Dataram, Imation (back in the black, but revenue down), Ingram Micro, Object Design (back in the black) and PCD.

Mediocre returns came from Philips Electronics, Torex and Ultradata. Very poor results came from Groupe Bull, Information Resources (just in the black) and Sterling Software.

Other financial news included profit warnings from JD Edwards, Ortel, SCI Systems and SSA; and stock splits from CNET and Kronos. There was also the news that Evans & Sutherland is re-stating its financial results for June and September 1998.

Locally

Infowave (+26.3%)
JemTech (-23.8%)
Selective Financial Group (-35.7)
Techcom (++87.5%)
Vesta (+30.4%)
Y3K (+40.8%)

Internationally

Digital River (-22%)
JD Edwards (-21.1%)
Lycos (-27.4%)
Marcam (-34.8%)
PSDI (+22.8%)
SSA (-20.6%)

It seems that Microsoft is intending to reorganise itself, regardless of the outcome of the DOJ hearings, in order to focus its efforts on the Internet more effectively and to serve its consumers better. Whether these two events are linked is obviously the subject of much speculation.