Gateway says it's not for sale
Posted by Daniel Fleshbourne on 17 September 2002 - 12:00 · no comments & 55 views
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For some time, analysts have suggested that Gateway might be prime takeover material. The latest speculation that the company might be on the block came up this week when BusinessWeek reported rumors that a leveraged buyout firm might be interested in purchasing Gateway for $5 a share. However, Gateway Chief Executive Ted Waitt owns 31 percent of the company, and a spokesman said that the CEO has no interest in selling.
"Ted Waitt has said publicly a number of times, including our most recent earnings call, that the company is not for sale," said Gateway spokesman Brad Williams. "We feel like our current capital structure is the right one." Williams would not say whether anyone has approached the company with an offer. However, two of Gateway's rivals have gone private in the past two years, and both say they are benefiting from being away from Wall Street's glare.
Both MicronPC and Emachines were taken private last year, and both say the move has improved the bottom line. Such buyouts have become more prevalent as the once-soaring valuations of technology companies have crashed back to earth.
Microsoft's plan, known as Licensing 6, has faced stiff resistance because it could as much as double volume-licensing fees, according to research firm Gartner. A number of the company's competitors have been tapping into this dissatisfaction as well as frustrations about the cost of Microsoft software, to lure customers to Linux-based systems and rival business software.
In August, Hewlett-Packard said it would boot a Microsoft software package from its Pavilion line of consumer PCs in favor of software from Corel, a less-expensive alternative. Several foreign governments, wary of depending too heavily on Microsoft, have also begun to experiment with Linux-based software.
Microsoft on Monday downplayed the significance of Novell's advertising campaign.
"I haven't seen the full-page ads they are taking out, so I can't really comment. But we aren't focused on PR efforts from our competitors. We want to make sure we stay focused on giving customers the tools and programs they need to help their businesses succeed," said Microsoft spokesman Dan Leach.
Separately on Monday, in a quarterly filing with the Securities and Exchange Commission, Novell took aim at Microsoft on the antitrust front. This comes as a federal judge prepares to make a decision about Microsoft's proposed settlement with the Justice Department and a related case in which several states are seeking harsher sanctions.
In the filing, Novell accused Microsoft of "exploiting its desktop operating monopoly in a way that is designed to extend its market power into the market for server operating systems, and to claim control of network and Web services such as authentication, using many of the same anti-competitive practices found by the United States District Court to be in violation of the nation's antitrust laws."