By David Sims
The news as of the first coffee this morning, and the music is the greatest album in rock, The Rolling Stones’ Exile On Main Street. No argument, please.
So why did Hong Kong software maker CDC Corp. drop out of the hunt for a majority stake in CRM software developer Onyx yesterday?
According to InfoWorld Daily that eliminates the possibility of long, drawn-out struggle for the troubled CRM vendor, which is to the good, I guess.
CDC’s proposal was to kick in all the assets of CDC Software, and $50 million in folding green, for a majority of Onyx’s common stock, keeping Onyx a publicly-listed company. Onyx’s management announced two weeks ago they were rejecting the deal.
So taking a page from Qwest’s playbook, CDC then said they wanted to deal directly with Onyx’s major shareholders, see what they thought about CDC’s proposal to merge its software holdings with Onyx’s. Evidently that’s off the table now as well.
Earlier this month, the Puget Sound Business Journal reports, “Onyx officials gave a variety of reasons for turning down the offer, including: CDC Software assets are performing poorly; CDC lacks a sustained history of profitable operations and has a poor record of delivering shareholder value; and synergies between the Onyx and CDC product lines are limited.”
Specifically, Dow Jones reports, Onyx said on Jan. 5 its board unanimously rejected CDC’s offer for being “highly dilutive” to Onyx shareholders. Plus they didn’t think there would be anything but “limited synergies” between the companies. And they didn’t like CDC’s idea that Onyx pay a premium for CDC Software division assets.
In fact, Onyx management said, we have no interest in selling the company. Period. We like the single life.
Fine, CDC said, we’ll pick up our ball and go home. “The execution risks of the proposed transaction are heightened given the circumstances including the lack of receptiveness by Onyx’s management and board and uncertainty of the Onyx business prospects,” is how CDC put it in officialspeak in a press release.
That being the case, “CDC is therefore unwilling to offer a cash or share premium to the Onyx shareholders at this time given that the valuation is already significantly higher than when CDC first approached Onyx with its proposal.” Didn’t want those grapes anyway.
The only publicized offer Hong Kong-based CDC, which operates the China.com Web site and makes enterprise software, mobile applications and online games, threw out was that they’d pay up to $50 million in cash for a majority stake in Onyx. No other terms have been publicly disclosed.
Steven Chan, CDC’s Acting CEO has recently announced the purchase of the assets of JRG Software Inc., an on-demand supply chain vendor, and says CDC has commenced discussions for “several other complimentary and accretive acquisitions.”
Predictably Onyx shares tumbled as a result of CDC’s announcement, shedding at least 19 percent to $3.90 on the Nasdaq. Shares of CDC, which have traded between $2.37 and $4.40 over the last year, were up 4 cents at $4.20 on the Nasdaq.
But stay tuned: As InfoWorld notes, “Last year, it acquired Onyx rival Pivotal through a process that began with an unsolicited bid that Pivotal initially rejected. After further negotiations, Pivotal eventually acceded to CDC’s overtures and agreed to the takeover.” Roses and chocolates optional.
Don’t know why I find this so funny, but I think it’s hilarious that some hackers, the day before President-elect Evo Morales gets inaugurated in Bolivia, put the lyrics to the Turkish national anthem on the Web site of Bolivia’s Foreign Ministry.
Thousands of journalists trying to get credentials for the historic inauguration of the leftist Morales, and anyone who tried to access the Foreign Ministry’s page was redirected to a site with the Turkish national anthem’s words instead. Stupid, juvenile, but for some reason really funny.
A study released by Strategy Analytics Wireless Network Strategies service this past week found that “one in five European cellular users say they’d consider getting rid of their landline phones in favor of their cell phones.”
The findings are part of a wide-ranging look at worldwide cellular use, which concludes that the cellular industry is on course for 2.5 billion subscribers by the end of 2006, and 3.5 billion by the end of 2010.
The report, “Worldwide Cellular User Forecasts, 2005-2010,” reports that the industry will generate $800 billion in service revenues by the end of the decade.
Some Europeans have already weaned themselves off landline, as the research found about 20 percent of homes in Western Europe without it, relying exclusively on cellular phones.
One reason why more haven’t ditched landline is the cost of
cellular. If costs were the same, according to the survey, fully two-thirds of
the respondents said they’d discontinue landline service. Despite such glitzy
promos as giving away iPods and Xboxes, maybe European cell operators would be
better off simply holding down prices and communicating pricing plans clearly.
Strategy Analytics’ survey also found that over half of the respondents who described themselves as “heavy VoIP users” would like to use their mobile phones at home more – if they could do so using VoIP.
The report highlights two key trends in the global wireless market in 2005 – one that emerging markets, such as Russia, Indian and Indonesia contributing phenomenal levels of subscriber growth, up 40-50 percent over 2004 levels. The prediction in the study is that African nations, including Nigeria and Algeria, will be leading growth markets in 2006.
The second reported “key trend” is the coming of age of the high-speed 3G market. David Kerr, VP Global Wireless Practice, says “W-CDMA user numbers jumped from 16 million to 49 million during 2005, with CDMA2000 1x EV-DO users up from 12 million to 26 million.”
Kerr also finds that “Europe finally joined Japan in delivering meaningful W-CDMA numbers, while the USA also made leaps in EV-DO. We expect both of these technologies will double their subscriber counts in 2005.”
Don’t get all excited about fiber optic in Europe just yet. Yes, France Telecom announced this past week that it plans to put a fiber-to-the-home network in place in France, which is nothing but good news. Unfortunately, a report from the investment bankers at Goldman Sachs a couple days earlier showed that overall, fiber in the Old World still has a long way to go.
How bad is it? Belgium is the best at it. But its Broadway project, slated for completion this year, “completes its broadband link on very high speed DSL, not fiber… and it is only intended to reach 50% of households in Belgium,” according to Total Telecom.
Telecom Italia has a pulse, putting fiber to the node in 63 cities, giving 26 percent of the country a shot at it. Spain’s Telefonica hasn’t even decided such an investment’s worth the time or money, Deutsche Telekom’s fiber stops at the curb.
Goldman Sachs analysts think one critical aspect of fiber buildout is “the possible impact on telco revenues of voice-over-IP services, especially VoIP delivered by alternative service providers across broadband lines unbundled from national operators’ networks,” Total Telecom reports:“The analysts estimate the average cost of fully unbundled lines in Europe is just 10.5 euros a month, with shared LLU at 3.6 euros a month.”
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