Proxicom on Monday announced that it had received an offer of $7.50 per share, or about $347 million, from Dimension Data Holdings, a South African tech company. That offer constitutes a "superior proposal" to Compaq's $266 million offer, which valued Proxicom at $5.75 per share.
If Compaq doesn't make a more favorable offer by 5 p.m. EDT on Monday, May 14, Proxicom will take the Dimension Data offer, executives said. In that case, Compaq will be entitled to a $10 million termination fee.
A Compaq representative Thursday said the company is "evaluating our options." Analysts said it's unlikely that Compaq will raise its bid for Proxicom.
The Dimension offer was made public Monday, a week after Compaq made its bid for Proxicom.
The bidding war came as somewhat of a surprise to industry watchers. The services industry has been rocked by bad news and tough economic times. Proxicom's stock hit a new low recently, and the company last week reported a loss of 13 cents a share, in line with reduced estimates. Other consulting companies such as Razorfish, IXL Enterprises and Viant have struggled as well.
The possibility of a bidding war had sent Proxicom's shares up this week, but they stumbled a bit in premarket trading Thursday, falling 3 cents to $7.50 on the Island ECN. Shares have gained 24 cents to $7.77.
Compaq was hoping to expand its services offering with the Proxicom purchase. Proxicom designs business-to-business e-commerce sites and offers support for, among other things, application development and network design.
Dimension Data designs computer and communications networks and provides customer relationship management and procurement software.