Bank touts Advantage Group overseas but finds no takers

Friday 6th April 2001

By Nicholas Bryant

Investment bank Credit Suisse First Boston has been trying to sell ailing e-commerce company Advantage Group for at least six months but there have been no takers.

It is understood Advantage chiefs mandated the bank to prepare an information memorandum and sell the company offshore initially, but the business, whose shares are nudging 70c, attracted no interest.

It has since been touted closer to home.

One party apparently began due diligence two months ago but walked away when staff made it clear sign-on bonuses would be required to keep them on board; otherwise they were leaving anyway.

That rings true if the recent top-level departures of e-commerce chief executive Mike Stobbs, international sales manager Paul Heneghan and chief operating officer Andy Wilkinson are anything to go by.

Sources close to the company said Advantage was also running short of programmers after a number had chosen to depart.

Retiring chief executive Greg Cross, who will remain at Advantage as a director, refused to confirm Credit Suisse First Boston's role but said: "We have over a period of time retained a number of advisors and we continue to look at a number of strategic relationships and partnership opportunities."

Calls to Credit Suisse First Boston for comment on its role went unanswered, as did calls to Advantage cornerstone shareholder Eric Watson and chairman Evan Christian.

Analysts contacted were generally pessimistic about Advantage's future.

"They can't find anyone to buy, they're not going to be able to raise any cash, they've got a huge burn rate, they've got to pay their staff and they're not getting any money through the front door," one said.

Another reckoned Advantage's shares had finally reached reasonable levels.

"If you look at its peer group internationally, 75c is the absolute maximum it should be."

Despite being a victim of last year's Nasdaq tech wreck, Advantage's news has gone from bad to worse since it was ticked off by the Stock Exchange for the way it reported its 2000 annual results.

Early last month Advantage reported its interim profit had fallen by 82% on the previous corresponding period.

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