Olivetti refused to comment this week on rumours that it has broken up negotiations to sell its PC unit to the Klesch group, in order to take up a better offer. Speculation is rife that NEC is that bidder, renewing its earlier attempt to buy the troubled PC division.
A notice in Monday?s 'Financial Times' revealed that NEC/Packard Bell had raised $115,000,000 of immediate finance, listing that the loan was arranged by Banque Nationale De Paris and Sumitomo. These two organisations were among investors that put heavy pressure on Olivetti to sell its PC division two months ago.
Although company officials would not comment on speculation, one source at Packard Bell said: ?We?ve never been particularly strong in Europe and Olivetti owns lots of corporate business there. Packard Bell wants a share of that market.?
The Klesch group, led by American financier Gary Klesch, is one of the few organisations that has shown interest in buying Olivetti PC. It sent a final offer to the Italian company about three weeks ago, offering up to 350 billion lire for the business. But sources close to Olivetti say it decided to scrap the bid from Klesch this week following a better offer from elsewhere.
Shares in Olivetti soared 4.8 per cent from 22 lire to 477 lire on Monday with news that the company has sold an 8.3 per cent stake in its profitable cellular phone venture Omnitel, which has also been on the market, to Mannesmann of Germany for $285.7 million.
The transaction brings a much-needed injection of cash of around $300 million into the Italian group. But analysts are still focusing their attention on the more critical sale of the company?s troubled PC unit.
Olivetti has been trying to sell its PC unit for two years. ?It is imperative they sell it,? said Nimrod Schwartzman, an analyst at James Capel. ?They are on the line saying it will be done this year.? Paul Mahoney, general manager of the Olivetti PC company in the UK, said: ?The PC company?s doing well, the sooner we split off the better. It doesn?t fit the structure of the group whose strategy now is telecomms and systems integration as opposed to hardware manufacture.? According to Mahoney the PC company has been profitable for the past five months and has been growing market share by one to two per cent in most European countries. ?We have about a 4.5 per cent market share in the UK,? he said.
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