Shares in IT infrastructure services vendor Getronics plummeted more than 16% after it revealed that it is no longer in talks with an unnamed US suitor.
Getronics had announced on July 3 that it had received a formal expression of interest from a US company, which was widely reported to be SystemsNet, a Maryland-based services supplier. However, Getronics has now confirmed that following initial discussions, the talks have been terminated.
The company’s shares fell 16.2% to 5.47 euros in trading on the Amsterdam stock exchange on Wednesday, which is below the level they stood at before the takeover interest was originally announced.
Despite this setback, Getronics remains a prime target for a takeover. The company’s financial performance has been stuttering and it admitted in May that a poor performance at its UK operation may keep it in the red in 2007.
Getronics’ market capitalization now stands at 678m euros ($935m), which values it at just over a quarter of its 2.6bn euros ($3.6bn) full-year 2006 sales.
One company that has shown an interest in Getronics in the recent past is Dutch telecoms operator KPN, which has just announced its intention to build up its desktop services capabilities, by pulling back a desktop outsourcing deal with Atos Origin and bringing it back in-house.
KPN would be going down a well-trodden path if it did expand its IT services interests through acquisition. Belgacom increased its network integration and management capabilities last year with the $700m takeover of Telindus, while AT&T, BT, Telstra, and France Telecom have all made services purchases in recent quarters.
If KPN moved for Getronics, the deal would most closely resemble Deutsche Telekom’s purchase of Germany’s largest PC reseller and systems house Debis back in 2001, which formed the core of its T-Systems division. T-Systems currently manages more than 1.4 million desktops, and won a deal last year with Centrica to manage its data center and desktops supporting 23,000 users.