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Common Stalk
Whatever's in that ADIC bouquet, Overland doesn't like it.
October 14, 2005
2 Min Read
NOON -- Scorned suitor Advanced Digital Information Corp. (Nasdaq: ADIC) won't take "no" from rival backup supplier Overland Storage Inc. (Nasdaq: OVRL).
In a letter to Overland CEO Chris Calisi this week, ADIC CEO Peter van Oppen made it clear his team is willing to fight its way into a union. They're ready with lawyers to meet Calisi "anytime and anywhere." And they plan to show up at Overland's shareholder meeting on November 15 to vote against a proposal that would block ADIC, which owns 9.28 percent of Overland, from acquiring more than 15 percent of the company -- a bonafide "poison pill." (See ADIC Courts Overland.)
All this, and a wilted bouquet. Check it out:
Dear Christopher and Scott:
We received your letter of September 2, 2005, in which you indicated thatOverland's board of directors and management "are not interested in engaging ina dialogue regarding sale of the Company." We are disappointed by your position.... We continue to believe that a combination of ADIC and Overland would be ofsignificant benefit to our respective shareholders. Accordingly, ADIC isprepared to offer to acquire all of the outstanding shares of Overland commonstock for a cash price of $7.90 per share.
Van Oppen is talking about paying in the range of $110 million, a wee percentage over market cap on the day the offer was made. Perhaps Overland is right to hold out. Granted, the company lost a key OEM in Hewlett-Packard Co. (NYSE: HPQ) this year, but it's also gained a special, secret pal with plans for a tape virtualization product. (See Overland, OEM Ink Deal .) Not to mention that its stock went up 1.64 percent to $8.06 today.
Pete's unconvinced, though:
Our all-cash offer for 100% of the outstanding stock of Overland would provideyour shareholders with certain value, on a timely basis, without the substantialexecution risk inherent in the new strategy management announced in August.Today, those shareholders have little real liquidity, given the low tradingvolume in your stock. [Emphasis added.]
Talk about sass. We can't wait to see the fur fly at that meeting next month. By then, maybe ADIC's offer will be more in line with Overland's expectations -- or vice versa.
Mary Jander, Site Editor, Byte and Switch0
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