"Globes" learned that RealNetworks is negotiating the acquisition of Israeli company Geo Interactive.
Geo Interactive is trading at London’s AIM at a value of $193 million, but it is assessed that RealNetworks may acquire the company for more than $300 million, at a value, that is, of $400 million. The company refused to comment.
The principal parties at interest in Geo Interactive are its four founders: Naftali Shani, Zur Dabush, Sharon Carmel and Eli Reifman (16.8% each); Ari Zelkinder, through Olamic Holdings (5.22%); and the public. The current deal is one of the acquisition of interested parties’ shares.
RealNetworks supplies hardware and software, enabling media of various types, mainly video, to be operated on the Internet. The company is traded on NASDAQ at a value of $4.4 billion. RealNetworks’ main competitors are Microsoft and Geo Interactive. Despite is market strength and powerful brand-name, RealNetworks has recently been at a disadvantage vis-a-vis its two rivals, since the use of its software programs still requires the user to download a particular software.
Microsoft chose to include its software for the use of video in its Internet browser, Explorer. It thereby obviated the need for downloading special software for anyone equipped with the browser, which is distributed gratis. Geo Interactive developed a technology which eliminates the need for using download software. By acquiring Geo Interactive, RealNetworks will boost its chances of competing against Microsoft.
In October 1996, Geo Interactive raised $19 million in London, at a value of $158 million. In June 1998, the company raised $42 million, at a value of $276 million after money. Following the issue, the company’s value climbed to a peak of more than $300 million, but the share subsequently plunged.
Published by Israel's Business Arena June 28, 1999