Alpha Microsystems said Wednesday that its acquisition by TeleVideo Systems Inc. was abruptly canceled this week, just days before the $25.5-million purchase was scheduled to become final.
The surprise cancellation leaves Alpha Micro, once the subject of two unsolicited takeover bids, on its own and looking for a suitable merger or acquisition partner with which to weather the ongoing shakeout in the computer industry. Alpha has lost more than $4 million in the past 18 months.
The aborted $8-per-share acquisition by TeleVideo--originally announced just a month ago--may breathe new life into Point 4 Corp.'s attempt to buy Alpha Micro. Last month, Point 4, a Tustin computer maker, launched a bid to acquire 49.9% of the company for $6 per share in a deal that would have paid $5.50 for each of the remaining shares. Point 4 dropped its offer once Alpha Micro agreed to the TeleVideo deal.
TeleVideo, a Sunnyvale computer maker, offered few reasons for its move, saying only that it had determined that the acquisition "would not be an appropriate fit." The cancellation comes in the wake of a major shake-up of the Northern California company's board of directors, a series of moves which saw three directors resign and two new members added.
Richard Cortese, chairman and chief executive of Santa Ana-based Alpha Micro, said he was not bitter at the turn of events and vowed to continue looking for another business to acquire, to merge with or to be acquired by.
"It's not the end of the world," he said. "We're going to survive."
Cortese speculated that the acquisition was the innocent victim of a changing philosophy on the board of TeleVideo. "We got caught up in a change of players," he said. "We were just a victim."
He said Wednesday that he would be willing to look again at an offer from Point 4 and would view it favorably if the terms were acceptable. "Point 4 is still a sensible merger partner. The problem before was the terms," Cortese said.
Point 4 President William Rigby said he would reevaluate the company's original offer and determine if there were a chance for another run at Alpha Micro. "On the surface, the fit is there," he said.
Point 4's original offer, considered low by many analysts, was opposed by Alpha Micro founders Richard Wilcox and Robert Hitchcock, who control 25.2% of the company's stock. The two founders then launched their own proxy battle to wrest control of the company from its current management. However, the proxy fight was dropped when the two agreed to support the TeleVideo offer.
Cortese said Alpha Micro is reviewing other potential suitors that have emerged in recent weeks. He said he wants a partner that has money, established computer sales and marketing channels, and whose products will not conflict or compete directly with those of Alpha Micro.
Among the companies repeatedly mentioned as a potential partner is Fortune Systems, a Silicon Valley business computer marker.