The spat between video solutions companies Scopus Video Networks Ltd. (Nasdaq:SCOP) and Optibase Ltd. (Nasdaq: OBAS) has taken another turn. On Friday Scopus announced that it was abandoning talks to acquire the business of Optibase. For its part, Optibase said the decision had been taken by the Scopus board and that it was "currently examining its alternatives, together with its legal advisors." Optibase is the largest shareholder in Scopus with a 36.5% stake.
Optibase, mounted a failed attempt to take over Scopus. The two companies later reached a settlement, and signed an agreement under which Scopus would acquire Optibase's digital video business in return for a share allocation, in a deal worth roughly $12 million.
Optibase gave details of the breakdown of the agreement in a filing with the US Securities and Exchange Commission (SEC) last Tuesday. "Optibase was highly surprised to learn from Tom Wyler, its executive chairman and CEO, that in a phone conversation held on October 23, 2008, between himself and Yaron Simler, Simler had informed Wyler that Scopus suspended the negotiations between Scopus and Optibase in connection with a sale of Optibase’s business to Scopus," it said. " In response to Optibase’s request for further clarifications from Scopus, Moshe Eisenberg, Scopus’ CFO sent an e-mail later that day to Amir Philips, Optibase’s CFO, in which Eisenberg clarified that Scopus suspended the negotiations for a short while because of two main reasons: (i) the current global market situation which makes the transaction difficult to support; and (ii) Scopus’ considerations of other strategic options.
Optibase added, "On the eve of the Sukkot holiday, a week before Scopus’ suspension notification, Optibase and Scopus had reached an understanding on all the principal terms of the transaction, including price and price adjustments, and targeted October 30, 2008, as the signing date of the transaction documents. Optibase does not understand what Scopus means by “considering other strategic options”. If Scopus suggests by this language that it considers making any decisions which may conflict with the transaction, in whole or in part, or which may dilute Optibase’s holdings in Scopus, Optibase considers such conduct on the part of Scopus to be not in good faith."
Published by Globes [online], Israel business news - www.globes-online.com - on November 9, 2008
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