The board of business telecoms company Stentor, based in Dublin, is recommending that its shareholders accept a £36 million sterling (€57.8 million) cash offer from Northern Ireland company Nevada tele.com.
Nevada has offered 29.3p sterling for each ordinary Stentor share and 380.9p sterling for each preferred ordinary share. Stentor shares, quoted on the London's Alternative Investment Market, rose 1/2p to 28 1/2p sterling after the announcement.
The latest offer price, however, is much less than Nevada suggested last month when it announced it was in talks with Stentor. Then the offer was expected to be worth about £45.8 million sterling (€77 million), valuing the ordinary shares at 37p sterling and the preferred shares at 481p sterling.
Stentor's chief executive, Mr Gerard O'Keeffe, said the lower figure reflected the sharp fall in telecoms share prices on international stock markets in the past month. While Mr O'Keeffe accepted some shareholders would be disappointed with the price, he said Stentor was not aware of any other potential bidders who would pay more than Nevada. The takeover would secure the business's future, provide the funding for further growth and development in Ireland and was good news for customers and Stentor's 40 employees, he said. Mr O'Keeffe is remaining with the company.
Stentor reported a loss before interest, tax, depreciation and amortisation of £3.9 million (€5 million) on a turnover of £7.5 million for the year to end March. Irrevocable acceptances covering 54 per cent of the ordinary shares and 98 per cent of the preferred shares are already in place - this equates to about 84 per cent for the total share capital.
CRBF, which funded Stentor's development since late 1998 and holds 37 per cent of the ordinary shares and 94 per cent of the preference shares, had told the board it did not intend to provide additional capital. Stentor had not been able to find an alternative source of funding for its day-to-day operations. This led Stentor's auditors to comment in its last annual accounts ". . . there is significant uncertainty as to whether the group will be able to obtain the finance required for the development of the group's business and discussions are currently taking place which may lead to an offer being made for the company's share capital. As the outcome of these discussions is not yet known, there remains significant uncertainty as to the continuance of the group's operations".
Nevada, which started trading in August 1999, is a joint venture between wholly owned subsidiaries of Energis Group and Viridian Group, a Northern Ireland power utility. Nevada has developed a new telecoms network and introduced integrated voice, data, e-commerce and Internet services aimed at business customers. Stentor sells a similar range of services to business customers and international call centres.
Stentor shares closed up 1/2p at 29 1/2p sterling yesterday.
