Netstore publishes update on ICM acquisition offer

In an announcement to the Stock Exchange, Netstore has confirmed its interest in acquiring ICM and has given details of the synergies it sees between the two companies. The announcement reads as follows:

“On 13 October 2006 the Board of Netstore confirmed that we expected to approach the Board of ICM regarding a possible offer for ICM.

“We have since made a proposal (the 'Proposal') to the Board of ICM indicating that if an offer were to be made it would be made on the basis of 10 Netstore ordinary shares for each ICM ordinary share. We have met the Board of ICM to discuss the proposal and request their recommendation and we have begun the process of responding to their due diligence questions.

“Netstore considers that the Proposal fairly reflects the contributions of
Netstore and ICM to an enlarged group and confirms that it does not intend to make an offer at a higher value. Netstore considers there to be a compelling commercial fit between the businesses along with the prospect of synergistic benefits and believes that a merger would create a strong IT services group with two valuable businesses.

“The Netstore directors believe that Netstore's business would provide the key to reversing the under-performance of ICM's support and solutions business and to re-establishing growth in this division by adopting Netstore's model of high added value step-by-step outsourcing of IT infrastructure and applications.

“The Netstore directors believe that ICM's business continuity operations would benefit from Netstore's customer relationships and the introduction of management with exceptional business continuity credentials.

“The Board of Netstore considers the Proposal to be very attractive to shareholders of both companies, allowing them to participate in an enlarged
Netstore/ICM group, and Netstore has received strong support for it.”

The announcement states that ICM shareholders holding a total of 33.3 percent of shares have written to Netstore to confirm that it is their present intention to accept such an offer if it is made.

Netstore says that it “is keen to pursue further discussions with the Board of ICM with a view to (i) securing its support for the preparation of an offer, including an appropriate inducement fee arrangement, and (ii) obtaining its recommendation for such an offer.”

ICM responded with a statement of its own, which reads as follows:

“The Board of Directors of ICM (the 'Board') notes the announcement issued by the Board of Netstore and confirms that it has today received from Netstore certain information requested at the meeting between the two companies on 8 November 2006.

“The Board of ICM is evaluating this information with its advisors and will update shareholders in due course. Shareholders are advised to take no action at this stage.

“The Board emphasises that there can be no certainty that an offer will be made.Furthermore there can be no certainty as to the terms upon which any offer might be made.

“This announcement has not been made with the prior approval or agreement of Netstore.”

•Date: 7th Dec 2006• Region: UK •Type: Article •Topic: BC markets
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