Tandem reviews network options

Parent company Tandem is considering how to best recoup itsinvestment

UB Networks could be sold or floated within six months by parent Tandem Computers, which has hired financial consultancy Lehman Brothers in the US to explore 'strategic alternatives'.

Options for UB include flotation, sale or merger, and the ending of its independent status, bringing it wholly under Tandem's control.

A source close to the company, said: 'Tandem have been saying for some time that they want a return on their money with UB. Acquisition or flotation seem obvious options.'

Tandem president Roel Pieper said it was reconsidering UB's position because it wants its Servernet technology to become 'a clustering network standard available to and supported by all the major network technology vendors'.

Mark Powell, UK marketing manager at UB, confirmed Tandem had been thinking about such a move for some time. 'It announced in the annual report about 18 months ago that it would be seeking to get back its investment in UB,' he said.

An industry source said Lehman Brothers was expected to come to a decision on UB's future within three months. 'I would expect an announcement within six months when the legalities have been sorted out,' he said.

Operating losses at UB were $3.4 million in its last quarter, ended March 31, on turnover of $108.5 million. Tandem lost $50 million on turnover of $576 million in the same quarter. Powell denied Tandem was seeking to dump UB because of poor performance. 'There was a bad period a few years back, but we corrected the problems,' he said. 'Tandem has been waiting until UB and the markets were in good shape.'