Techway subject of tug-of-war

Techway subject of tug-of-war

The future of integration and services company Techway has become cloudier, after the original takeover bid from investment firm Nova Pacific Capital was matched by a counter offer from secure transaction developer Intellect.

Nova Pacific's original offer of 30 cents a share was bettered soon after its announcement, by a share swap offer from Intellect of one of its shares for every 2.5 Techway shares, with a market value of 39.2 cents per share.

Nova Pacific then matched this with a cash offer of 38 cents per Techway share, only to have this offer bettered by Intellect, which added five cents per share cash to its original offer.

The question of who will actually own Techway should be settled in the next month on trading screens across Australia. Techway managing director Jon Brett says his company's directors have already advised shareholders that the original Nova Pacific bid was too low, and have now informed them of the raised offer from Intellect.

Intellect's executive chairman Ross Leighton said Nova Pacific's interest in owning Techway was sparked when it heard of the original takeover bid. He says Intellect has been working with the company's WEB Australia division for some months, and was aware of Techway's financial predicament. While relations between the two companies have always been good, it was possible this may change should Techway fall under new ownership, and thus it made sense to launch its own bid for the company, Leighton said.

At the time of lodging its second offer for Techway, Intellect revised the bids conditions, reducing the required ownership level down from 90 per cent to 70 per cent. Leighton believes Nova Pacific already holds at least 18 per cent of Techway's shares, and said Intellect would welcome Nova Pacific as shareholders.

Of his company's own bid, he said: "We're in this business in a very serious way, and our bid is pitched quite clearly at a level that we think reflects the value to Intellect shareholders."

Leighton sees WEB Australia's work in the field of Internet banking as being complementary to that being done by Intellect in the field of smart cards and transaction security. He feels together the two companies can make inroads into the potentially rich European market, where Intellect has been concentrating. "Our customer base there are banks and major retailers, and are exactly the same customers that are looking to move into Internet banking."

Leighton said one of the barriers to entry into that market is the need for an approved security architecture, which he says Intellect has. "And of course the synergy between ourselves and WEB Australia is that we can provide a security system that will be acceptable to the banking community in the European area."

Should Intellect gain control of Techway, Leighton says its intention would be to build and invest in the company.

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