Datafast and Chariot merger off

Stan Beer
Sunday, 11 September 2005 10:06

IT Industry - Listed Tech

They were to form the fifth largest national ISP, but now the merger is off between Chariot Limited (ASX:CTI) and Datafast Telecommunications Limited (ASX: DFT), with Datafast saying due diligence didn't pass muster.

Adelaide-based Chariot and Perth-based Datafast had been publicly negotiating the merger since October 2004. Each ISP has more than 100,000 subscribers and the combined company would have had 275,000 customers. Chariot being the slightly larger ISP was to have been the final holding company on completion of the merger.

Datafast released a statement to the ASX saying that it has terminated the Merger Implementation Agreement signed with Chariot Limited (ASX: CTI) on 13 July 2005.

"As a result of enquiries made pursuant to the Due Diligence provisions of the MIA, Datafast has become aware of several matters that in Datafast's opinion impact materially on the desirability of proceeding with the proposed merger," the statement read. "Consequently, considering advice from its corporate advisors, Datafast no longer believes that the proposed transaction, on its current terms, is in the best interests of Datafast shareholders."

"The outcome of the due diligence process led us to believe that the merger under the current terms of the agreement would not enhance value for Datafast shareholders," CEO Simon Ehrenfeld said. "Datafast will continue its successful acquisition strategy, ensuring that acquired companies fit the company's strategic models and stringent financial performance criteria."

Datafast has been advised throughout the proposed merger by PricewaterhouseCoopers Securities and Allens Arthur Robinson Solicitors.