Gateway Gets Offer for Retail Business
The former owner of eMachines announced Wednesday that he made an unsolicited offer to acquire Gateway's retail operations for $450 million, saying he felt the best way to increase the competiveness of the company would be to separate the retail business from other operations.
Lap Shun Hui, who owns Joui International, said he was also considering a deal to purchase all outstanding shares. He says he believes in both the Gateway and eMachines brands.
"But I also believe that in order to compete effectively, Gateway must separate its retail operations from its other businesses and make other changes to improve its margins," he said. "My proposal is aimed at accomplishing this separation in a quick and efficient manner to provide value to Gateway's shareholders."
Hui first expressed interest in an acquisition through a letter on August 3, however no discussions occurred as a result. In his letter dated August 21, he expressed disappointment and said the board needed to be more aggressive in solving Gateway's problems, noting the industry had evolved and the company had not responded.
"Gateway's stock price has continued to decline and the failure to name a replacement CEO for over six months has left Gateway in a position where it is unable to clearly and credibly articulate its strategic direction to the market," he wrote.
Shares of Gateway have tanked over the past several years, and sat as low as $1.50 earlier this week. Rumors of a sale have begun to buoy the stock, and it was up over 15 percent to $1.98 in late morning trading, possibly indicating Wall Street would be open to such a transaction.
In an early morning statement, Gateway confirmed it had received Hui's offer and would review it, but declined to provide any further details.