Merisel is in talks with distributor CHS Electronics to give away its loss-making European divisions and may pull out of Europe altogether as it struggles to solve its financial problems.
CHS is understood to be particularly interested in Merisel France, Germany and UK, but may take control of all Merisel's European subsidiaries. Merisel territories are run as separate businesses within Merisel Europe but negotiations have only just begun.
A CHS insider said: 'CHS are asking each Merisel country if they want the opportunity to join the group and Merisel is apparently thinking that it has to concentrate on its US business where it can make profit.'
He said CHS has approached Merisel Inc with some ideas about how to take over part or all of Merisel Europe. 'They are wondering how to make Merisel work profitably. In the UK I hear Garry Boon, (CHS UK managing director) and Jan Lawford (CHS sales and marketing director) think they have done a good job in 10 years on their own and are a bit reluctant about a possible merger with Merisel UK.'
Since Merisel CEO Mike Pickett resigned in February, speculation has grown that major changes would occur. Dwight Steffensen is now chairman and CEO and Ron Rittenmeyer is president and COO.
Venetia Edney-Ball, director of marketing and products at Merisel UK, confirmed that Rittenmeyer toured Merisel Europe last week but claimed he was merely being introduced to the subsidiaries. Edney-Ball did not deny that negotiations with CHS are under way, but said: 'We would not comment on that.'
Another source claimed that if Merisel is not paid for its bigger European subsidiaries it may insist on profit-related payments from CHS. 'If they do sell bits off, Merisel may have a rights issue and consolidate its US operation,' he said. 'They need to do something.'
Merisel boasted a turnover of $1.6 billion in its most recent financial quarter but lost $4.5 million in those three months. Its UK business claimed a turnover of around u224 million last year. CHS had refused to comment as PC Dealer went to press.
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