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March 13, 2004
Source: Global News Wire - Europe Intelligence Wire
The Dixons Group, the owner of PC World Business, has been unveiled as the 'stalking horse' in the Micro Warehouse auction saga.
Earlier this year CRN revealed that the reseller's European business was to be auctioned off by New York bank Miller Buckfire Lewis Ying (CRN, 19 January).
However, it has since been confirmed to CRN that Dixons has signed a contract to acquire the UK arm of Micro Warehouse.
Nigel Foxwell, managing director of Micro Warehouse, said: "A contract has been signed with Gores Technology Group, a US investment company.
"The sales process has yet to go to auction and the bid will be going through the courts in the near future. The auction is expected to take place in mid-May. If Gores is successful in its bid it has agreed that PC World Business will acquire the Micro Warehouse UK business from it."
However, 'stalking horse' status does not guarantee Dixons will definitely secure ownership of Micro Warehouse UK. Because of the open nature of the
auction, allowing bids from all interested parties, the retail giant may yet be 'gazumped' by a higher bidder.
Micro Warehouse's parent firm in the US entered Chapter 11 bankruptcy proceedings last year after its online assets were sold to rival CDW.
The latter firm is still tipped to be interested in buying Micro Warehouse's European business, as is Computacenter.
Clive Longbottom, service director at analyst Quocirca, said the acquisition could be a good move for Dixons.
"PC World Business has not been a huge success (in the mid-market)," he said. "It has a good customer base in the consumer and small office/home office markets, but it could use Micro Warehouse to pitch to the mid-range business sector. It also means Dixons will look at expanding its offerings away from box shifting, and this acquisition would give it a platform for value-added services.
"This will put a few noses out of joint, and allow Dixons to compete with the likes of Morse and Computacenter."