Former CEO makes takeover bid for IT services company Powerlan

Listed IT services company Powerlan has told its shareholders to sit tight after former chief executive Tomislav Matic launched a takeover bid for the company.

In a statement to investors released this morning, current chief executive Jon Newbery said the board has not yet considered the offer from Alpha Growth International, which is being run by Matic.

The Alpha bid is priced at 10c a share, subject to Alpha receiving acceptances from 90% of investors. Matic argues this is 33% higher than the company’s share price of 6c when Alpha first approached Powerlan with an investment proposal in early December 2009.

The takeover bid came on the same day that Powerlan announced a four-for-one rights issue to raise $16 million and $19.8 million.

Powerlan plans to use $10 million of the money raised to pay off debt to CPS Investments, Powerlan’s major shareholder which is controlled by Powerlan’s executive chairman, Ian Campbell.

In a statement to the ASX this morning, Newbery said the board is trying to clarify whether the Alpha bid will continue if the rights issue goes ahead.

Matic was an executive at Powerlan between 2000 and 2007, the last three years as chief executive.

His bid is also being supported by Chinese-backed company AsiaInfo Holdings, which is listed on the NASDAQ.

Matic said in a statement to the ASX that the Alpha bid provides shareholders with “the opportunity to receive an immediate and generous cash value for their Powerlan shares.”

“Powerlan has failed to deliver adequate returns to shareholders for several years, with three years of unacceptable losses, a share price decline of 79% over the past four years and no dividend paid to shareholder in 2009.”

However, the takeover speculation has put some fire under the Powerlan share price, with the stock up 13% to 13c in morning trade.