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Telecommunications Due diligence devalues LongReach
Telecommunications Due diligence devalues LongReach | Due diligence devalues LongReach |
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| by Stuart Corner | |
| Saturday, 15 July 2006 | |
  
ASX listed Allied Technologies, a supplier to the Defence Department, announced on 7 June plans to merge with communications equipment company LongReach Group. The two companies claimed that the combination would "lay the foundation for the building of Australia's first ASX-listed mid-tier supplier of integrated ICT based products, services and support, directed principally at the defence, security & intelligence sectors in Australia and internationally". The original plan was that Allied would acquire all of the issued shares in Longreach through the issue of one new Allied share for every 2.5 Longreach shares held by Longreach shareholders, and that Longreach option holders would be offered one new Allied option for every 2.5 Longreach options currently held. The two companies announced on 14 July that, following a period of further due diligence and discussion, the ratio of share exchange would be modified from 2.5 LongReach shares for each new Allied share, to 3.0 LongReach shares for each new Allied share. This will give current Longreach shareholders an undiluted interest of approximately 53 percent of the merged entity. |
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