Watson tipped to move on Zintel

Duncan Bridgeman

Saturday 17th April 2004

Speculation is mounting that Eric Watson is planning another corporate play this time with his former pal Evan Christian.

Sources said Mr Watson was looking at bringing together gen-i, the IT company he owns through Cullen Investments, with Zintel Group a NZAX-listed telco firm controlled by Provenco directors Christian and Nick Gordon.

It is understood Watson is desperately keen to exit gen-i, and this is a way of doing that, sources said.

Gordon and other Zintel directors denied any knowledge of a merger, saying there was no strategic fit between the two companies.

"I don't think that's going to happen, they are quite different businesses," Zintel director Paul Connell said.

Gordon, who was on holiday in Fiji, said "definitely not."

Maurice Kidd, a spokesman for Watson, also rejected the idea.

However, sources were adamant a merger was imminent and that Watson and Christian were back on friendly terms after a bust up in 2002.

Watson recently hosted Christian in his corporate box, while back in New Zealand on holiday.

Auckland firm gen-i has established itself as one of the biggest IT outsourcers in the country after last year securing a $50 million, four-year deal with the New Zealand arm of Insurance Australia Group.

Gen-i provides technology solutions and computer services and has eight branches in New Zealand and Australia.

According to its website, the firm generates an annual turnover of more than $135 million.

Founded in 1995, Zintel Group traded on the old unlisted security market before moving to the new NZAX board in November last year.

The company, which manages toll-free 0800 and 0508 telephone calls, reported a bottom line profit of $3.25 million for the year to March 31, 2003, on revenue of $35 million.

Gordon's family interests control about 60% of the company, while Christian bought 8% in 2002.

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