Negotiations between Sir Alan Sugar's Viglen and system builder
Stone Computers have come to an end after neither party could agree
on the blueprint for a merger or acquisition.
A deal would have created a more powerful British PC builder,
but the combined volumes would have remained relatively small
compared to the likes of HP, Dell and Acer.
Discussions between the two organisations began last summer, but
a number of hurdles have scuppered the plans.
James Bird, chief executive at Stone Group, said, "I can confirm
the deal is off and there is no way forward," but he was unable to
comment further.
Bordan Tkachuk, chief executive at Viglen added his confirmation
that the deal was off.
Sources familiar with the talks said negotiations reached an
advanced stage, but the companies were confronted with financial
issues that could not be resolved.
Initially, Stone intended to acquire Viglen but it is believed
that Sugar then decided to remain with the combined businesses as
chairman.
Viglen is the last bastion of Sugar's IT empire; following the
sale of Amstrad to BSkyB in 2007 he stepped down as chairman of
Amstrad last year.
In the year to 30 September 2007 - Viglen's latest audited
accounts - revenues dropped nearly 11% to £45.6m, and profits dived
97.2% to £117,276. The firm blamed this on the loss of a contract
in Northern Ireland and on the management team's focus on the
relocation of the business.
In the 12 months to 31 December 2007, Stone revenues grew nearly
43% to £52.8m. These results included an £11m contribution from the
acquisition of Compusys.
It is believed that Stone will remain on the acquisition
trail.
A version of this story originally appeared on
Microsope.