John Hui Offers Big Bucks for Gateway Retail Business
August 24, 2006 3:19 AM
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Computer mogul John Hui has his eye on another PC manufacturer
Lap-Shun Hui, better known simply as
, has placed a $450M USD offer out on the retail division of Gateway PCs. Hui, co-founder of eMachines and founder of KDS, has a bit of a name for himself in the PC industry with mega-takeovers and low-cost PC components.
Hui recently got his name in the papers after
putting in an $87M USD bid
out on the retail division of NEC. However, it appears as though that deal had fallen through as Hui placed his $450M USD bid on the company in a letter dated August 3, 2006. In another memo, dated August 21, 2006, Hui adds "I am very disappointed that Gateway has chosen not to constructively engage in discussions with me and my advisors on the proposal that I sent to you on Aug. 3. I believe that management and the board need to adopt a sense of urgency to address Gateway's problems."
eMachines sold for more than $30M cash and $235M stock in June of 2004 to Gateway, of which Hui received a fairly nice check. With Hui's bid on the retail division of Gateway, things really will have come full circle has the majority of the reason Gateway continued to hold market share over the last two years has been directly due to the eMachines brand.
Hui already holds nearly 5% of Gateway as part of a stock-swap he received during the eMachines acquisition.
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If they were smart...they'd listen
8/24/2006 9:02:51 AM
I remember eMachines were the absolute worst thing on the market a number of years back. They promoted the cacheless wonder (Celeron) computer systems for cheap and they were of really poor quality. But over the years, eMachines changed their stripes and actually built a darned good quality machine. A lot of them used AMD Athlon XP chips moving into the A64 realm. But they use standard parts, can be repaired anywhere, and are quick little machines...all for around $500.
eMachines also has made some really nice laptops and really were gaining steam in 2004 when they sold off to Gateway. Gateway hasn't done much with the brand unfortunately; although the sales of eMachines probably are propping up Gateway at this point.
If this guy wants to give it another whirl, I'd give him the opportunity considering how he was able to get eMachines going in the right direction.
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