Palmtop computer vendor Psion is set to buy Amstrad and will gear up to battle with Nokia as it swallows up Dancall, its digital mobile phone subsidiary.
The proposed takeover will be paid for in Psion shares, priced at no less than 200p per share. This will value Amstrad at u230 million and represents a payment of u80 million to Amstrad chairman Alan Sugar, who owns about one third of the company.
A Psion representative said: 'The boards of the two companies are in negotiation and everything is still on the table.'
Sugar is expected to concentrate his energies on Tottenham Hotspur Football Club, where he is chairman, and will relinquish his place on the board if the deal goes through. Psion chairman David Potter is likely to head the company.
Amstrad's turnover for the year ended June 30 was u272 million, compared with Psion's u91 million turnover for the same period.
Psion will be in a position to broaden the products and services it provides following the takeover, which will see Viglen become part of the company.
Psion will be interested in combining technology from Amstrad's digital mobile subsidiary Dancall, with its portable computers to provide remote access to networks and the Internet. This enables Psion to compete more effectively with its rivals when it comes to supplying fax and email services to portable computer users.
The absence of Spurs' chairman from the new company's board may be because of Danny Fiszman, a non-executive director of Psion. Fiszman is also a director of Arsenal.
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