UPDATE: ComnetiX board recommends takeover by L-1
Identity solutions company rejects richer all-stock offer by BIO-Key due to concerns about liquidity; shareholders to vote 8 February; BIO-Key finds a silver lining in a $300,000 Oklahoma interoperability deal
That should settle it. After weeks of speculation and heavy bidding, the board of Ontario, Canada-based ComnetiX has decided to reject an all-stock offer from BIO-Key valued as $1.29 per share in favor of a $1.12 per share cash bid from industry bohemeth L-1 Identity solutions. “We are convinced that L-1’s $1.12 all-cash offer is clearly superior to Bio-key’s share offer and is in the best interests of our shareholders,” said ComnetiX chairman and CEO Bernard Crotty.
“We strongly encourage our shareholders to vote in favour of the plan of arrangement with L-1 at our shareholders’ meeting,” which was recheduled for 8 February while the board considered BIO-Key’s offer.
In rejecting the BIO-key bid, ComnetiX expressed concern over a lack of liquidity in Bio-key’s shares and said it believes the offer, if accepted, would have required the company to secure additional financing and would have been “dilutive” to ComnetiX shareholders. In addition, the Bio-key Bid was conditional upon the companmy becoming a reporting issuer in Ontario. “There is no assurance that BIO-key will be able to obtain the necessary order from the Ontario Securities Commission on a timely basis,” ComnetiX said.
Some good news for BIO-Key: the company this week announced $320,000 in contracts to install wireless interoperability systems for the Oklahoma Highway Patrol and the Stillwater, Oklahoma Police Department. The two organizations will purchase 400 new MobileCop and PocketCop devices. As seven other local agencies are currently using BIO-Key interoperability systems, all nine will now be able to communicate seamlessly.
-read more about the ComnetiX deal in this Canadian Press report; read more about BIO-Key’s Oklahoma deal in this company news release
