Investors look for new solution
- — 02 May, 2000 17:04
Investors continued to dump Solution 6 shares yesterday despite the company's announcement on Friday it would push ahead with plans for a $US150 million merger with US counterpart, Elite.
On Friday, Solution 6 and US-based Elite said they would extend their offer to pay $US11 a share for all of Elite's outstanding common stock for the fifth time. The offer came after the US Bureau of Competition said it would recommend that the Federal Trade Commission challenge the merger.
The extended offer for Elite share holders expires this Friday (US time). Elite and Solution 6 said they had agreed not to terminate the proposed merger before the offer expires.
And in what was a miserable day, in miserable times, for the software developer, on Friday Telstra said it would renegotiate its deal to take a 40 per cent stake in a combined Solution 6 and Sausage Software. In a statement, Telstra's convergent business manager Ted Pretty said the "recent movements in price and valuations" in world markets meant "financial elements of the transaction may be adjusted".
Those "movements" saw Sol 6's share price fall to its lowest level for the year, down almost 16 per cent, or 79 cents, to $4.45 at close yesterday. The stock has traded as high as $17 this year; in the last week of March it was still listed at around $13. However, the embattled, former billion-dollar company is now worth less than $600 million.
Sausage Software was also trounced by investors yesterday, its share price fell almost 13 per cent, or 38 cents, to close at $2.58 -- down from a year high of $8.20.