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Gateway shareholders express their outrage over the $710 million USD Acer acquisition

Acer made a surprise move in late August when it announced its intentions to purchase U.S.-based Gateway, Inc. The deal was valued at $710 million USD and was crucial in helping Acer get a stranglehold on the U.S. market. Gateway is currently the fourth largest PC manufacturer in the U.S., while Acer is the third largest PC manufacturer in the world.

"The acquisition of Gateway and its strong brand immediately completes Acer's global footprint, by strengthening our US presence," said Acer chairman J.T. Wang at the time of the announcement.

"Acer has made impressive strides in the global PC market and the board and I welcome this merger," added Gateway CEO Ed Coleman.

All is not roses, however, when it comes to the merger. Shareholders in two separate lawsuits are claiming that Gateway was worth well more than the $710 million USD price tag that was agreed upon. The shareholders note that Gateway had a fiduciary responsibility to its shareholders and was not putting its shareholders interests in mind when it agreed to the acquisition.

"The Company’s directors breached their fiduciary duties to stockholders by approving the Merger Agreement and the transactions contemplated thereby, including but not limited to the Offer, and claims that these transactions are both unfair and coercive to the public stockholders in a sale of the Company," the lawsuit claims.

The lawsuit goes even further to indicate that "The Company’s directors breached their fiduciary duties by failing to include certain information in the Schedule 14D-9, which purportedly denies the stockholders a fully informed voluntary choice whether to approve the Merger Agreement or seek appraisal."

It is not known what price shareholders would have been content with concerning the Gateway purchase, but John Hui offered just $450 million USD for Gateway's retail division in August 2006. Gateway rejected the offer.

Wang Jen-tang, Acer's chairman and CEO, has even noted that its investors and some market analysts indicated that the $710 million price tag may have been too much. "Regarding the criticism that the price is too high, I think whether a price is high depends on whether the buyer will in the end be able to realize synergies," said Jen-tang to the Financial Times. "If he is able to do that, then it is not high. If he can't realize the synergies, then it's a very high price."

Shareholders may also be smarting over Gateway's priority position when it comes to Packard Bell. Gateway has the right of first refusal (ROFR) for complete control of PB Holding Company, -- thus gaining complete control of Packard Bell. Gateway acquired the ROFR in June 2006 from Hui.

Jen-tang plans to exercise the right and is already discussing Acer's plans for Packard Bell.

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RE: Gateway still exists?
By StevoLincolnite on 9/13/2007 3:32:13 PM , Rating: 2
There is no suck thing as old technology anymore.

He speaks the truth, as they say one mans trash is another mans treasure.

And just because something is "Old" does not make it useless.
Those cheap budget machines you buy in supermarkets are plenty powerful enough for your Email+Internet+Popcap/Gamehouse games, plus Microsoft Office.
In-fact I do the same thing on a Pentium 3 450, 256mb of ram and a Geforce 2 MX200.

Well we don't have Walmart in Australia that I know of, but we do Have Kmart machines, and they have a VIA C3 2000+ processor in them, remember they sell them as budget machines, and because of that you will not get the high end equipment, but for some people, its far more than enough horsepower.

there is no real new technology; they are still getting rid of the old items first.

And some people wont use all the new technology, it just goes to waste, I wont use 64bit goodness for a long time, so why should I upgrade to a 64bit processor?
I don't download or install many games, is it necessary to have more than a 40gb HDD?
Do I need AGP/PCI-E card when the on-board Intel card does everything?

People laughed at Intel back in the day when they released the Celeron A, Intel had a vision of budget computers for under a grand, now they are here and now everyone complains about lack-lusture performance or there isn't enough functionality etc.
You pay for what you get.

RE: Gateway still exists?
By Seemonkeyscanfly on 9/13/07, Rating: -1
RE: Gateway still exists?
By Targon on 9/14/2007 4:02:56 AM , Rating: 2
Pretty much every processor is 64 bit enabled these days, even if most people don't realize it. The only exceptions might be some low end Intel machines or the clearance specials from years ago. Every K8 AMD processor is 64 bit for example.

Now, if a machine comes with Vista, that is it's own problem because you will really want more system memory in the machine just because the OS is a bit bloated. If you can find a machine with XP pre-installed instead of Vista, then yea, a cheap budget machine will work, but Vista on less than 2 gigs of memory is really going to drive most people crazy due to the pauses caused by virtual memory. That's the problem with budget these days.

Budget processing is fine, but if the OS sucks up too much of the memory in a machine, it will feel sluggish.

As for disk space, a LOT of the space taken up is from pre-installed stuff. Also, applications like Microsoft Office take a LOT more room than they probably should. 40 gigs SHOULD be enough, but games are not the only things that can quickly fill up a hard drive.

"If they're going to pirate somebody, we want it to be us rather than somebody else." -- Microsoft Business Group President Jeff Raikes
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