Lynx Talks Buyout with Kalamazoo

ADP Software named as a rival in bid to take over the group which issued a profit warning last month

The ownership of Kalamazoo Computer Group was up in the air last week after the company revealed it was the target of takeover bids by two companies, including Lynx Holdings.

Speculation was rife that the Kalamazoo operation was likely to be bought after Richard Last, chief executive of Lynx Holdings, confirmed the company had been in talks with Kalamazoo. But another company, ADP Software, was also widely tipped to be putting in a bid.

Last said the discussions were still at a preliminary stage, but that Lynx was only interested in the computer services arm of the business and planned to sell off the print division.

?In its 1996 accounts, the computer division had a turnover of around #40 million, whereas the print division turned over about #18,? he said.

Dave Smith, operations director at ADP, refused to confirm the company was in talks with Kalamazoo. He said: ?The style of our parent company is to move towards acquisitions in Europe. Our business is selling solutions into the dealer marketplace.?

But Kalamazoo has put the acquisition in doubt, after it emerged that 40 per cent of the company?s shares may not be available for sale. The trust fund was set up by the company?s Quaker founders for the benefit of employees, and it is not clear whether the company is at liberty to sell the shares. Kalamazoo?s share price rose on the takeover speculation, putting the company?s value at #45.1 million.

Kalamazoo Group refused to comment on the issue, but confirmed that it was in discussions with a company.

Kalamazoo issued a profit warning last month, when it emerged that two senior managers had falsified sales figures in internal accounts (PC Dealer, 7 May).

Chairman Bob Jordan had warned shareholders that the group would not make the expected #1 million increase on last year?s results.