IQ puts ball in Spicer`s court

By Staff Writer for IQ Business Group

Johannesburg, 14 Feb 2000

The IQ Business Group says it expects Spicer to "give clarity to the market on a final proposal" on its merger by the end of next week. There is no talk of calling the wedding off.

"The complementary nature of the service offerings and skills base, the extent of the blue chip client base of both entities and the combined management skill, still remains as fundamental drivers of the proposed transaction," IQ MD Johan Roets said in a press release.

When the intention to merge the two companies was announced late last year, it was expected that Spicer would buy IQ for around R400 million. In January that price was adjusted to up to R635 million. The given reason was a strong annualised income in the IQ books and weaker than expected performance from some Spicer divisions.

A recent cautionary announcement by Spicer alluding to difficulties in the negotiating process had rumours flying that the companies were a cultural misfit. "The IQ guys are all suits and ties," says one industry watcher. "Can you see that going with Sas du Toit, Spicer executive chairman?" While Du Toit is known for his flamboyant manner and dress sense, IQ executives are often characterised as conservatives.

IQ says the companies have agreed on a process to conclude the merger, but it is still waiting for a final proposal. It is not known if the purchase price will be influenced.

"Events of concern have unfolded very recently within Spicer, which have necessitated IQ to reconsider the terms of the current proposed transaction," Roets said in his statement. According to Business Report, Mike Higgo, the executive headhunted from ATIO to lead the Spicer customer relationship solutions division, has been relieved of his duties pending an investigation. Higgo left ATIO last year amid allegations of contract breach and uncompetitive behaviour.

A combined Spicer IQ is expected to have a market capitalisation of R1.4 billion and will, according to Du Toit and Roux, have the necessary mass to compete in the global IT arena.