GE takeover deal enters cul-de-sac

Acquisition Fate of French reseller Ista remains in the balance.

GE Capital, the acquisitive US reseller giant, has had to stall its plans to buy the debt-riddled French reseller Ista, following further negotiation problems over the terms of a possible takeover.

GE was originally set to take over the troubled French company in November last year, but its plans were thwarted when GE European CEO Jost Stollman suddenly left the company in the middle of negotiations in October.

It is common knowledge that Ista, which is France's largest reseller, was on the brink of filing for the Gallic equivalent of Chapter 11 administration.

The company's last hopes were hanging on finding a buyer with a tangible offer.

GE found out the extent of Ista's financial problems when it carried out an audit of the company last year. As at the end of the 1996 fiscal year, Ista had accumulated client debts to the tune of Ffr one billion and SFAC, the French credit insurer, was forced to determine whether or not to give further financing terms.

It is now understood that the reseller is in negotiations with Ista's creditors to reach an agreement on the exact figure which GE would have to pay them to take over both Ista and its debt.

Ista was granted a stay of execution by the trade tribunal of Nanterre, France, in December. The company was given until 15 January, by which time it was meant to have found a buyer, or file for administration.

According to one distributor with ties to the French company, the banks also want to pull their lines of credit.

Other sources close to the negotiations between GE and suppliers have mentioned that the figure of 45 cents in the French franc - to be payable to Ista's major suppliers - was under consideration, but as yet no agreement has been reached.

The trade tribunal has now extended the negotiation period for Ista until 15 February. GE Capital refused to comment on the delay.