The board of IT services firm Atos Origin have rejected all possible suitors and declared it is in the best interest of all “group stakeholders” to maintain the company’s independence.
The company, which ha substantial UK contracts, suspended its shares last week pending an announcement on its future today, 14 May, has broken off all talks with possible suitors.
In the absence of a binding offer for the company, the board has decided to “pursue and accelerate, on a stand-alone basis, the value-creating strategy announced in February this year.”
Bernard Bourigeaud, CEO of Atos Origin, said, “We received expressions of interest to buy all the shares of the company in March and decided to review these proposals. Following this review process, the Supervisory and Management Boards reached the unanimous decision that the best option for Atos Origin and all its stakeholders is to pursue the implementation of the transformation plan on a stand-alone basis in order to create ongoing value for our shareholders, clients and employees alike.
“We confirm our target of doubling our operating margin in absolute value by end 2009, and with a solid client base, strong recurring revenues and a healthy financial situation we look to the future with confidence.”
Ovum analyst Phil Codling said, “Atos Origin will be relieved to have drawn a line under its private equity takeover saga. It was back in October 2006 that firm rumours of interest from major private equity firms first broke, and since then the company has been keen to rid itself of the uncertainty that such goings-on inevitably cause.
“It's taken two months to reach closure since Atos Origin released its 'response to expressions of interest' (in March) and allowed interested private equity firms to take a closer look at the company's books. The same process at CSC last summer took almost three months, so Atos Origin has reached a conclusion relatively rapidly. Faster is definitely better, given the way these affairs can distract and tie-up staff and even put customers off signing contracts.”
Atos has major contracts in the UK public sector, including the Department of Constitutional Affairs – where it secured part of the work on the long delayed Libra case management system for magistrates’ courts when rival Fujitsu’s contract was not renewed – NHS Scotland and the Government Gateway web portal.
The company is the global IT partner for the Olympic Games. In the UK it is responsible for delivering the new electronic trading platform for the London Insurance Market and is the outsourcing partner for financial services company NFU Mutual. Other UK contracts include services to Premier Travel Inns and rail company GNER and four other train operators.
But Atos posted losses of €264m (£178m) in its full-year results for 2006 in February, after taking a €378m (£255m) hit in impairment charges on its UK and Italian businesses.
In an announcement issued with its results, Atos said the UK problems had been caused by “delays in new business”, but major UK contracts signed at the end of 2006 would start “contributing progressively” to revenues and profits this year.
The IT services firm launched a major business transformation plan and a shake-up of its senior management team in the UK.
Analyst firm IDC has described the company’s UK operations as “overweight in the public sector” and “struggling to ride the wave of IT services demand revival in the private sector”.
The company was also been accused of “overstretching itself” with its venture away from core IT services and into healthcare service provision, after a £257m deal to supply the NHS with diagnostic services ran into trouble earlier this year.