RSSGateway Rejects Retail Buyout Offer
By Ed Oswald | Published September 1, 2006, 4:43 PM
Gateway said Friday it had rejected a bid by the founder of the eMachines brand to purchase the retail portion of its business in a $450 million transaction. Lap Shun Hui had made the unsolicited offer in late August, saying separating the business would make the company more competitive.
Hui first expressed interest in acquiring Gateway's retail arm in a letter dated August 3. Gateway's board failed to respond, so the entrepreneur sent a second letter on August 21, restating his offer although criticizing the board for being too lax in solving the company's financial woes.
"Gateway's stock price has continued to decline and the failure to name a replacement CEO for over six months has left Gateway in a position where it is unable to clearly and credibly articulate its strategic direction to the market," he wrote at the time.
Shares of Gateway have tanked over the past few years, reaching a low of $1.30 as recently as mid August. Talk of an acquisition excited Wall Street, and the stock rebounded slightly in its wake to around $2.00 per share in the past week. However, now it appears as if it is not to be.
The company said that "after careful consideration and in consultation with its financial and legal advisors" such an transaction "was not in the best interest of shareholders." However, the company said it was committed to enhancing shareholder value.
Representatives for Hui were not available for comment. However, his August 21 letter indicates that the board's rejection may not be the end of the story. In the event of a rejection, he entertained the possibly of buying the entire company.
According to financial analysts, Hui could offer $800 million or more for the entire company in that event. Some believed his moves had more to do with drumming up interest in the company from other potential suitors, thus driving up the value, and stock price, of the company.
My business has about 40 gateway laptops and have used them for years. We dont have many issues and almost all problems are completed pretty fast. The sales force is a little of a pain but they are not the only comany with those issues. We also carry 3-4 year warrenties but for the most part the systems have been good in our experince
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|I don't see what the problem is; Gateway and emachines are virtually the same thing....equally worthless. There are only two kinds of pc's worth having: the one you build (preferred) and the one you buy (Dell or Mac).
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|Actually, they are literally the same thing. Same company. Though believe it or not, eMachines (at least before the merger) had one of the best QA percentages while at the same time being low-price. Which was why they were profitable unlike Gateway.
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|Dells are crap too. There are no good prebuilt PCs because they are made from the cheapest quality parts they can get their hands on, usually refurbished at that, and proprietary designs so upgrading is out of the question.
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|Wait a minute... Gateway still exists?! ;)
I can't remember the last time I saw anyone with a Gateway or even considering buying one. They really should just give up already. Its inevitable.
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|I have a Gateway and I have to say that I absolutely hate it but I can't afford to go out and get a new one right now with college and everything going on.
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|We purchase Gateway computers for our business (both laptops and desktops). For the most part, they are good computers. We haven't had to do much work on them. It has always appeared to me that Gateway uses decent parts (not the best quality), but the EMachine's had always used lower quality parts for their computers. I believe that since they were acquired by Gateway, their quality of parts has gone up (at least in my experience with them). I say they're both viable options for desktop replacements (just as good as Dell anyways). So, don't knock em till you try em!
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|ooh, i predict a hostile takeover...
http://en.wikipedia.org/...eover#Forms_of_takeover
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