Online IT reseller Action looks set to be the subject of a takeover bid, with former suitor Insight Enterprises among the leading contenders.
Action, believed to be the UK's largest mail-order reseller and distributor, has confirmed it is currently "in advanced discussions with a third party that may or may not lead to a cash offer being made for Action, at a price of not more than 80p per share". The company last month said it had been "approached" by a third party.
Industry sources believe the third party is most likely to be either US-based reseller Insight Enterprise, which tried to buy the company two years ago, or retail giant PC World.
This year, PC World's parent company, Dixons Group, reseller Computacenter and online e-tailer Dabs have all been linked with bids for Action. However, David Palk, Action's managing director, said at the time that the board of directors was not looking to sell.
North London-based Action came close to being sold to Insight in 1999 in a multimillion pound deal, but the US giant abandoned negotiations after Action saw sales fall and its share price decline.
Tony Price, managing director of rival WStore, said that if an acquisition did take place it would mean both good and bad news for Action's competitors.
"The bad side is that both firms in question, along with Action, are large. Once merged, they will create a massive company, which is bad news for competitors," Price said. "When two companies merge there is always a consolidation issue, usually in the form of staff or sales fall-out."
But while the speculation is going on, he claimed that "it is a good chance for us and others to go for their customers".
Brian Burke, manager at Computanet, a Dun & Bradstreet company, said there was still a long way to go before a buyer for Action was revealed. "There are quite a few interested parties who will drive a hard bargain," he said.
For its most recent financial period ended February 2001, Action achieved a paltry profit of £400,000 on turnover of £137m. Its next results are due at the end of August.
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