BATM Advanced Communications Ld
14 March 2000
Not for Distribution in the United States of America
BATM Advanced Communications Ltd ('BATM')
Co-operation arrangement with Samsung Electronics Co. Ltd ('Samsung')
and discussions with Sun Microsystems Corp ('Sun')
Placing of new ordinary shares to raise US$80m
Proposed CREST application and 10 for 1 share split
Memorandum of understanding with Samsung
BATM and Samsung have signed a memorandum of
understanding which establishes a framework for the
development of a strategic partnership in the broadband
transmission and IP switching markets with immediate
effect. This co-operation is expected to lead to BATM's
VDSL and networking technology being incorporated into
Samsung's set top boxes, the sale of enhanced products to
Telco's customers and sales of BATM's Titan products to
Samsung's customers. Other Research and Development and
marketing co-operation centred on BATM's current and
planned product offerings and Samsung's extensive and
comprehensive ATM offerings is also envisaged under the
memorandum.
Discussions with Sun Microsystems
BATM has been in discussions with Sun Microsystems, Inc. since January 2000
concerning a business relationship. There is no guarantee that these
discussions will result in a final agreement.
In addition, on January 26, 2000, BATM offered Sun an option to acquire such
number of ordinary shares at the then market price (which was £38.13 per
share) to raise US$10 million (£6.1m). This option is conditioned on the
finalisation of a business agreement between the two companies.
Placing
As stated in the announcement on 3 February 2000 by BATM
of its proposed acquisition of Telco Systems Inc
('Telco'), BATM is raising approximately US$80m (£51m) by
way of a placing of new ordinary shares for cash with
institutional investors. Approximately US$60.8m (£38.5m)
of this will fund part of the US$260.8 (£165.0m) cash
consideration for Telco, with the balance providing
flexibility for BATM to cover expenses of the Telco
transaction and further bolt-on acquisitions such as that
of 49.9% of Eldor described below.
Dresdner Kleinwort Benson is sole bookrunner for the
placing. The book will open with immediate effect and
Dresdner Kleinwort Benson reserves the right to close the
book at any time. The number of shares to be issued and
the issue price will be announced following completion of
the Placing.
Further information regarding the Telco Acquisition
A circular to BATM shareholders, seeking approval for the
Telco acquisition is expected to be posted to
shareholders shortly. BATM has received clearance from
US anti-trust authorities for the Telco acquisition. The
Extraordinary General Meeting to approve the transaction
is expected to be held on 4 April 2000. Under UK GAAP
and BATM accounting policies, Telco's audited turnover in
the year to 31 December 1999 was US$105.0m (£66.5m) with
operating profit of US$13.3m (£8.4m). Net assets as at
31 December 1999 were US$32.5m (£20.6m).
Acquisition of 49.9% of Eldor
BATM announced today that is has signed a definitive
agreement to acquire 49.9 per cent. of the issued capital
of Eldor Machshevim Ltd ('Eldor'), an Israeli information
technology services company. The consideration will
amount to US$1.3m (£0.8m) payable in cash from BATM's
existing resources. In addition, BATM will extend a loan
of US$2.5m (£1.6m) to Eldor. In the year ended 31
December 1998, Eldor generated turnover of approximately
US$32.5m (£20.6m) and profit before taxation of
approximately US$1.73m (£1.1m). As at 31 December 1998,
net assets of Eldor amounted to approximately US$(0.6)m
(£(0.4)m). Teldor Computer Systems Limited, a listed
Israeli company, will retain a 50.1 per cent. holding of
Eldor.
The Directors believe that the acquisition of the stake
in Eldor will enable BATM to offer a broader range of
services to existing customers as well as offering the
ability to cross sell BATM's existing product range in
the Israeli market.
Proposed application to CREST and share split
Following the announcement on 10 March 2000 by the FTSE
Equity Indices Committee that BATM is now eligible, from
June 2000, for inclusion in the FTSE UK Indices, the
Company intends to seek approval to join CREST. To
enable this, a change to the Company's articles of
association is required. It is the Board's intention to
amend the articles of association, as appropriate, at the
Company's next annual general meeting, scheduled for May
2000. It is also the Board's intention to implement a 10
for 1 share split at that time. Further information will
be sent to shareholders in due course.
Enquiries:
www.batm.com
BATM 00972 3 938 6888
Dr Zvi Marom (Chief Executive)
Ofer Bar-Ner (Finance Director)
Dresdner Kleinwort Benson 0207 623 8000
Mark Smith
Ludgate Communications 0207 253 2252
Edward Macquisten
Kleinwort Benson Limited ('Dresdner Kleinwort Benson'),
which is regulated in the UK by The Securities and
Futures Authority Limited, is acting exclusively for BATM
in connection with the acquisition and no-one else and
will not be responsible to anyone other than BATM for
providing the protections afforded to customers of
Dresdner Kleinwort Benson, or for giving advice in
relation to the acquisition.
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