Spicer has withdrawn the joint cautionary notice with Brainware, which was issued on 5 February. According to the withdrawal notice, consensus could not be reached on the pricing of the transaction.
Executive chairman of Spicer, Sas du Toit, says negotiations suffered a terminal breakdown because of Brainware`s unrealistic pricing expectations. "The price they were talking about was far above anything we had expected and what we were led to believe would be asked," he says.
Du Toit says that Spicer will not change its policy, but is not looking for another acquisition in the near future. "We never needed the deal, it simply looked like a good opportunity. The pros outweighed the cons, so we went for it. But we are not going to go out and buy someone else now."
Harry van den Berg, a director of Brainware, says the asking price was not unrealistic. "Our shares are undervalued on the JSE and we could not use that as a basis for negotiations. We decided to ask what they are really worth." He also says the upcoming release of company financial results will justify the company`s stance.
Brainware also says it has no other acquisition plans. "Growth has been organic for the last six months and we don`t plan to change that," explains Van den Berg.
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