RealTime IT News

Prism Calls Off UK Acquisition

[Johannesburg, SOUTH AFRICA] Mobile commerce and smart card company Prism Investment Holdings revealed yesterday that it has terminated negotiations to acquire Telesmart Developments after the U.K. based software company rejected renegotiated terms.

When negotiations began towards the end of last year, Telesmart's business was on the up and Prism suggested at the time that they would have been willing to part with UK 4.5 million for the acquisition. The company fortunes since plunged, however, with losses being reported in April and Prism CEO Alvin Els reporting that Telesmart had suffered "substantial losses" in the three suubsequent months to June.

In a statement released yesterday, Prism explained that it would have been untenable to continue with the deal on the original terms in light of continued disappointment with Telesmart's' trading performance and defections of some of the company's senior management.

Despite these losses, Prism still appeared keen to negotiate but at a price UK 2.5-million lighter than the initial amount.

Els revealed on Thursday that Telesmart had initially accepted these new terms but had reneged at the last moment. "Despite early indications of acceptance of the renegotiated terms," he elaborated, "Telesmart vendors have subsequently indicated their unwillingness to accept the terms offered and shareholders have accordingly advised that Prism will not be proceeding with the acquisition."

Prism is not likely to lick its wounds for too long, however, having announced a deal in Portugal earlier this week. Els also hinted yesterday that an alternative U.K. acquisition would be announced later this month.