The proposed sale of distribution giant Tech Pacific Holdings has been cancelled.
In a company announcement, Netherlands-based parent company Hagemeyer stated market conditions were not conducive to earning what it considers to be a suitable price.
The announcement, made at Hagemeyer's annual general meeting, said the group decided it was in the best interest of shareholders to keep Tech Pacific as part of its portfolio.
"With the current uncertainty affecting the ICT industry worldwide it has become clear that extending the divestment process further would not maximise shareholder value," the statement said.
"Recently we came to the conclusion that given the present state of the IT market and the Australian economy, we can't get a sales price that reflects the value of Tech Pacific. We can't get what it's worth, so we won't sell," said Hagemeyer Chief Executive Officer (CEO) Rob ter Haar at the presentation of the company's first-half results in Amsterdam.
Hagemeyer will look at selling Tech Pacific again when the economic tide has turned, said Chief Financial Officer (CFO) James Riddell. "As the cycle recovers, then sure in the long term we'll look at divesting Tech Pacific," said Riddell.
Hagemeyer said it will provide appropriate support to ensure the company will be well-positioned to benefit from any upturn in the industry.
"Tech Pacific is a great company. It has been able to win market share in almost all of its markets. We have always supported Tech Pacific and have been a good shareholder that has always made investments when needed," said Ter Haar, adding that he believes that Tech Pacific being on the block for many months did not affect customers in any way.
Ter Haar would disclose no details of the negotiations.
"We talked to interested parties, some talks were very detailed. If we could have sold, we would have. One day we will get a good value. Negotiations take a lot of energy and time. Now it is back to business," said Ter Haar.
Hagemeyer's results indicated the Australian operations were the thorn in the group's side over the last 12 months, mainly due to the weakness of the Australian dollar. "The organic growth achieved by Tech Pacific reflects strong growth in India, Singapore and Hong Kong offset by Australia where poor economic conditions had an adverse effect on ICT spending," the company said in the statement.
Joris Evers, IDG's correspondent in Amsterdam, contributed to this report