By David Sims
[email protected]
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.”
If read off-site hit http://blog.tmcnet.com/telecom-crm/
for the fully-linked version. First CoffeeSM accepts no sponsored
content.