Letter to Shareholders
Dear Shareholder,
Telco’s Offer
You should by now have received Telco’s proportional offer for 80% of
your shares in Market faxts. Telco is offering 2 Telco shares for
every 5 Market faxts shares. This offer will expire on Monday 23
October 2000. As at 16 October, Telco had received acceptances for 1.1%
of Market faxts shares. Telco has advised that none of its conditions,
including the minimum acceptance condition of 40%, has been satisfied
or waived.
The Directors of Market faxts believe that Telco’s offer is inadequate
and does not reflect your company’s true value:
- Telco’s proportional offer does not allow you to accept for more than
80% of your shares. This means that shareholders who accept Telco’s
offer will retain a small holding in Market faxts. This is likely
to reduce the liquidity of each shareholder’s holding in Market faxts,
as well as reducing the liquidity of the stock as a whole. - The Directors of Market faxts have been unable to identify
any significant synergies between the primary operations of Telco and
the business of Market faxts. Telco has some minority interests
in internet-related companies but it is unclear how any synergies between
these interests and Market faxts could be extracted for Market
faxts shareholders. - The Directors of Market faxts believe Telco intends to use
Market faxts as a venture capital business. This would change
the nature of the business of Market faxts from the internet-based
company in which you originally chose to invest. - Telco has twice attempted to obtain ASIC approval to withdraw its
offer. The Board believes this indicates that Telco is not committed
to the success of its offer.
The Directors of Market faxts continue to recommend that you
reject Telco’s offer.
ISIS’ Offer
On 23 August 2000, ISIS announced its intention to make a takeover offer
for all of the shares in Market faxts by offering 1 ISIS share
for every 3 Market faxts shares. Based on closing prices at the
date of the announcement, this equated to 27 cents per Market faxts
share. At that time, the Directors of Market faxts announced their
intention, subject to certain caveats, to recommend that Market faxts
shareholders accept ISIS’ offer.
In its Bidder’s Statement lodged with ASIC on 18 October, ISIS has made
some changes to the terms of the offer as originally announced. In particular:
- there is no longer a minimum acceptance condition; and
- ISIS is now offering 1 ISIS share plus 1 option for every 3 Market
faxts shares.
Since ISIS announced the takeover, there have been several developments
which, in the opinion of the Directors of Market faxts, have had
a material adverse impact on the attractiveness of ISIS’ offer to Market
faxts shareholders. These developments are as follows:
- ISIS’ share price has fallen by 78%, from 81 cents on 22 August to
19.5 cents on 18 October. Based on information provided in the Bidder’s
Statement, this implies that, as at 18 October, ISIS’ offer of 1 ISIS
share and 1 option for every 3 Market faxts shares equates to
9.6 cents per Market faxts share. - ISIS has today released its revised financial projections for the
year ending 31 December 2000. ISIS has warned that it expects to report
a loss of $29.7 million for the year, compared to a profit projection
of $5.6 million in the prospectus for the float in September last year. - In announcing their intention nearly two months ago to recommend ISIS’
offer, the Directors of Market faxts stated one of the reasons
for the recommendation to be the revenue opportunities arising from
the joint development of both on- and off-line local directories. However,
ISIS has announced a restructure of its business which includes a reduction
in the ongoing level of development activity in its business services
directory.
Following lodgement of the Bidder’s Statement by ISIS yesterday evening,
the Market faxts Board has met today to consider the ISIS offer
in the light of recent developments.
The Directors of Market faxts recommend that Market faxts
shareholders reject ISIS’ offer.
Market faxt has been advised by ISIS that its Bidder’s Statement will
be despatched to shareholders around 20 October. Market faxts‘
formal response to ISIS’ Bidder’s Statement will be conveyed to shareholders
as soon as practicable.
The two major shareholders, Chris Gosselin and myself, have informed
the Board that we do not intend to accept either Telco’s or ISIS’ offer,
as they currently stand.
The Directors believe that Market faxts has built a unique and
valuable infomediary platform in InfoChoice. The Company is currently
in discussions with potential partners to convert its InfoChoice content
and community into e-commerce transactions. In addition the Company is
also considering a number of corporate opportunities.
Market faxts maintains a significant cash balance of over $6 million,
equating to around 12 cents per share as at 30 September 2000.
We will continue to keep you informed of material developments. In the
meantime, if you have any queries in relation to the Telco or ISIS offers,
please do not hesitate to contact Chris Gosselin at Market faxts
on (02) 9247 6788 or Evelyn Horton at Deutsche Bank on (02) 9258 2736.
Yours sincerely,
John Mullen
Chairman
Market faxts Limited
For more information:
Chris Gosselin
Chief Executive Officer
InfoChoice Limited
PH: [02] 9247-6788
MOBILE: [0411] 537 830
Tim Allerton
City Public Relations
PH: [02] 9281 7272
InfoChoice.com.au is Australia’s
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