Idion spurns DataMirror`s final offer

By Iain Scott for Idion Technology Holdings

Johannesburg, 17 May 2002

Idion Technology Holdings has rejected Canadian company DataMirror`s final offer of 180c per Idion share, and CEO Nicolaas Vlok says he believes the matter has come to an end.

"In my opinion, it`s over," he says. "I cannot see the hostile bid succeeding with commitments to reject the offer from 54% of the shareholders. This makes it highly unlikely that DataMirror can gain the 50% plus one share it is seeking."

Would you let a burglar eat with your family?
Nicolaas Vlok, CEO, Idion

Vlok says that in addition to research at the Idion head office in Johannesburg, independent adviser PricewaterhouseCoopers (PwC) visited subsidiary Vision Solutions in Irvine, California, where discussions were held with local management, technology and distribution partners, as well as a sample of customers.

PwC says in its letter to the Idion board that it believes DataMirror`s final offer is "still significantly less than the true value of Idion and accordingly is not fair and reasonable to the interests of the shareholders of Idion".

It points out that DataMirror has not disclosed its plans for the business and thus the implications of DataMirror becoming a major Idion shareholder cannot be assessed.

DataMirror announced this week that it had bought Coronation Holdings` 10% stake in Idion at 180c a share.

"DataMirror is fishing, and the fact that they may have caught a mid-sized fish doesn`t mean they have won the prize," Vlok comments.

"Coronation actually did all the other shareholders a favour because that pushed the average price that DataMirror has paid up to 117c."

Vlok says Metropolitan, which owns about 8% of Idion, has provided an irrevocable undertaking not to sell at less than R4 a share, unless PwC deemed the offer to be fair.

He adds that he will wait with interest to see what DataMirror will do with its minority shareholding.

"We see great value in Idion and if DataMirror prefers to remain invested in our shares rather than in developing their own business, that says something about Idion. If they want to sell, we remain willing to help them find buyers for their Idion shares.

"Why are they carrying on? It seems they are either desperate to acquire our technology as well as our distribution channels and our maintenance revenue stream, which has doubled in the last two years, or they are trying to maximise their exit value."

Asked how he would respond if DataMirror, with about a third of Idion`s shares, approached the company for a seat on the board, Vlok says: "Would you let a burglar eat with your family?"

Financial director Willem Richard says there is no obligation in terms of South African legislation to give DataMirror a presence on the board.