Proxicom (Nasdaq: PXCM) dropped 27U.S. cents to $7.37 in morning trading Friday after Compaq Computer (NYSE:CPQ) said it decided not to raise its offer for the company, clearing theway for a $7.50-per-share buyout by Dimension Data of the UK.
Compaq, meanwhile, lost 10 cents to $16.
“Compaq intends to aggressively drive its strategy of expanding our servicescapabilities,” said Peter Blackmore, executive vice president of worldwidesales and services at the Houston, Texas-based computer maker. “However, atthis time, we don’t feel current economics warrant increasing our bid forProxicom.”
Compaq last month agreed to buyProxicom, an Internet consulting company, for $5.75 per share in cash.Dimension Data, however, subsequently toppedthat bid, offering $7.50 per share in cash.
Under terms of the original agreement, Proxicom will have to pay Compaq a$10 million termination fee.
Compaq has said it wants to boost the portion of revenue it gets fromconsulting and services to 30 percent from 21 percent currently. TheProxicom purchase would have been a step toward strengthening the company’sprofessional services offerings.
Proxicom earlier this month posted a first-quarter pro forma loss of $7.6million, or 13 cents per share, compared with pro forma income of $2.7million, or 4 cents, in the same period a year earlier. The company alsotook a $57 million restructuring charge in the quarter ended March 31st tocover layoffs and other cost-cutting moves amid weak demand forInternet-related services.
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