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The deal, which involves giving Icollector shareholders one share in the enlarged company for every 37 Icollector shares, is conditional on shareholders holding at least 90 per cent of the stock agreeing to the acquisition of the entire holding by Ableauctions. With almost 24 per cent of the ICollector stock held by directors of the company and a further 73 per cent held by institutional investors, it is virtually a done deal, especially as the alternative is likely to be the closure of ICollector. The decision will be taken at an Extraordinary General Meeting of the company on September 5.

The transaction is being overseen in London and the acquisition would see the removal of ICollector from the Ofex Market, which deals in unquoted companies. Share trading in ICollector was suspended on Ofex following a request from the company directors on April 18, after they announced merger talks.

Key to the success of the takeover offer has been the blessing of eBay Premier, who provide the software for ICollector’s auctions transaction service and would maintain their relationship following the deal.
ICollector managing director Peter Houghton confirmed that the company expected to retain the ICollector brand, acting with autonomy from their London headquarters, following the acquisition. He could not comment on whether the existing board would remain in place, saying that would be a matter for Ableauctions, but he said ICollector expected to continue focusing very much on their core activities of providing information on art and antiques and developing their online auction transaction service with eBay Premier.

“The acquisition by Ableauctions will give us the backbone we have lacked,” he told Antiques Trade Gazette. “It brings to an end a difficult period of six to eight months and will allow us to continue as an indispensable tool for the antiques trade as a whole.”

The offer values each Icollector share at approximately 6p (nine cents) based on the price for Ableauctions shares of $1.43 per share agreed between the two companies, and based on an exchange rate of £1 = $1.42 prevailing on August 9, 2001. This would mean that ICollector shareholders are effectively being offered an initial holding that is worth approximately two thirds of their current position, but they stand to gain more if ICollector meets performance targets next year.

The major challenge will be to meet twin targets set for July 2002 which will earn their shareholders a further $5m in Earn Out Consideration Notes, convertible to Ableauctions shares with the approval of the company’s shareholders. The targets involve the number of sales they must hold in that month and ICollector’s total revenue share from those sales.

To date – starting on 1 February this year – ICollector have held a total of 82 live auction events and have have signed up 72 auction houses to participate in live auctions. Ableauctions operate auction and liquidation businesses in North America in San Mateo, California; Scottsdale, Arizona; Tacoma and Seattle, Washington; and Burnaby, Surrey and Vancouver, British Columbia. They have developed technologies to broadcast live auctions over the Internet and currently broadcast approximately 20 per cent of their live auctions over the Internet.

The company’s business strategy is to increase the profitability of their brick-and-mortar auction houses using live Internet broadcast technologies and to become an interactive Internet provider of Web hosting activities for auction houses, dealers and galleries internationally – in other words, they make a close fit for Icollector and their business strategy.

Ableauctions have confirmed that, following the implementation of the offer, the existing employment rights (including pension rights) of the employees of ICollector and their subsidiaries will be fully safeguarded.
NB: Ableauctions are listed on the American Stock Exchange under the symbol AAC.