Seven Network swallows Engin

Stuart Corner
Friday, 08 July 2011 15:50

IT Industry - Listed Tech

Seven Network has succeeded in its attempt to acquire 100 percent of its majority owned VoIP and Internet service provider Engin (ASX: ENG) with 85 percent of minority shareholders - comfortably ahead of the 75 percent needed - voting at an EGM in favour of its $0.90 percent offer for their shares.

Seven holds 57.33 percent of Engin through its subsidiary Network Investment Holdings and announced its $0.90 per share offer on 17 May $0.20,  more than it offered in its initial proposal of 2 December 2010 that was later withdrawn without explanation.

At the time of the offer Engin shares were trading at $0.51 and quickly rose to $0.80 on news off the offer. At the time of today's EGM they were trading at $0.895.

The new offer came in the wake of Engin, on 17 February, reporting significantly improved performance for the half year to 31 December 2010,  compared to the same period in 2009.

Engin's after tax loss of $111k for the six months to 31 December represented a $2.5m turnaround on the same period in the prior year. Decreased depreciation and amortisation expense (down $2.8m) was the key driver in this improvement, the company said. However EBITDA was $0, down on the December 09 and June 10 periods.

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