Austar pulls plug on eisa deal

Austar pulls plug on eisa deal

eisa shares stopped trading today after Austar announced it intends to pull out of its intended acquisition of the troubled ISP.

eisa requested the halt "in order to prevent trading in an uninformed market" and was expected to make a statement late this afternoon.

Austar announced last week it would not continue with its bid for eisa unless it received acceptances from over 90 per cent of eisa shareholders by Friday the 15th September. After receiving approximately 87 per cent, Austar has confirmed that the deal will not go ahead.

"Austar is not in a position, and does not intend, to compulsorily acquire the shares in eisa," a statement to the ASX confirmed.eisa company secretary Chris Glover told ARN last week that without the acquisition, eisa was likely appoint an administrator.

"Going to Austar would be a clean process," he said, "but under administration there are no guarantees."

However, Meagher told ARN today this does not mean Austar's interest in the ISP is over.

He believes Austar may acquire those elements of eisa it always intended to, regardless of whether it buys shares or assets.

"My understanding is that eisa will move to a point of voluntary administration, as they had indicated earlier," he said. "We would then look into talking with the administrator about what assets we could acquire if they choose to sell them."

Austar's interest in eisa has always revolved around the three regional ISP's eisa acquired twelve months ago. These ISP's, based in Darwin,Cairns and Canberra, have a subscriber base of around 25,000, and would be a prime target for Austar if eisa moves into administration.

"Given the regional nature of our existing business, these would fit in quite well," Meagher said. "The remainder of eisa as a business is also interesting. We are assessing what parts of the business would be interesting to acquire."

"We are hopeful that we can come out of this with as much as we first sought," he said.

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