Canadian company DataMirror has launched what appears to be a hostile takeover bid for Idion Technology Holdings.
Nasdaq and Toronto Stock Exchange-listed DataMirror announced this morning that it is to offer to acquire the entire issued share capital of Idion, other than the 16.4% interest it already owns.
The company is a direct competitor to Idion`s US subsidiary, Vision Solutions, and DataMirror says both compete for a similar customer base in common and different geographic markets.
The announcement took Idion by surprise. Corporate communications manager Corn'e Arnold says the company received a letter only this morning.
The letter has been referred to the Idion board for discussion and the company will be able to comment only once the board has reviewed it.
"No arrangements, undertakings or agreements have been concluded between DataMirror, Idion or any party acting in concert with either of them, in relation to the shares which are the subject of the offer," DataMirror says.
Its CEO, Nigel Stokes, is to outline more details of the bid at a presentation to shareholders and analysts in Johannesburg later this morning.
An offer document is to be sent to all shareholders within a month, but is expected to be posted on Friday.
Idion has about 112.56 million shares in issue. About 44% of the shares are in nominee accounts.
DataMirror has been hard-hitting in its assessment of Idion, saying that shareholders should accept the offer as they have "suffered a dramatic loss of value; Idion has invested shareholder funds unwisely; Idion is in a precarious financial position; and Idion has failed to meet performance expectations set by management".
It is offering Idion shareholders 65c a share, a premium to Friday`s close of 57c on the JSE.
DataMirror says this is also a premium of 71% to the 30-day trade weighted average price and a premium of 228% to Idion`s published net tangible asset value at 31 December 2001.
The Idion share was trading 7c or 12.28% up at 64c by midmorning today.
"DataMirror believes that its significantly greater financial strength, depth of management and global presence would materially enhance the Vision Solutions business and the prospects of both management and employees," it adds.
"Together, DataMirror and Idion can establish a leadership position in the iSeries High Availability market."
If the offer is accepted with respect to at least 90% of the outstanding shares, DataMirror will apply to end the Idion listing on the JSE.
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