Dimension Data begins tender offer

By Staff Writer for Dimension Data South Africa

Johannesburg, 14 May 2001

Dimension Data Holdings (DiData) is to begin a tender offer immediately for all of the outstanding shares of Proxicom after it outbid computer giant Compaq for the company.

London-listed DiData is to pay $448 million for Proxicom, which equals $7.50 per share.

This follows the decision by Compaq on Friday not to increase its offer to buy Proxicom.

"Compaq intends to aggressively drive its strategy of expanding our services capabilities," says Peter Blackmore, Compaq executive vice-president, worldwide sales and services.

"However, at this time, we don`t feel current economics warrant increasing our bid for Proxicom."

The decision came as a surprise to analysts who expected Compaq to better the purchase offer made by DiData.

Compaq had offered $5.75 per Proxicom share on 26 April.

"Under the terms of the merger agreement, Dimension Data will promptly commence a tender offer for all outstanding shares of Proxicom," DiData and Proxicom said in a joint statement released at the weekend.

"Any Proxicom shares not acquired by Dimension Data will be acquired in a subsequent merger."

Proxicom chairman and CEO Rail Fernandez is to be appointed to the DiData board.

"Members of the senior management team have signed employment contracts with Dimension Data," the companies say. "Dimension Data plans to retain the talent and employees of Proxicom and incentivise them accordingly to ensure a successful acquisition."

According to DiData CE and chairman Jeremy Ord, "The acquisition of Proxicom will enhance our solution offering to the US and the rest of the world.

"In addition, this will accelerate the visibility of the Dimension Data brand in the US and European marketplaces as a result of the alignment with a highly regarded company that has market leadership and a proven track record as a pioneer in Internet-based strategy development and execution."