Acer has announced a tender offer to purchase Gateway’s shares for $710 million, a hefty premium over the closing price of Gateway’s shares on Friday. Gateway is also exercising its first right of refusal to purchase the rest of Packard Bell.
Acer will pay $1.90 per share for Gateway’s common stock, a whopping 58% premium over the closing price Friday of $1.21.
Lenovo had been rumored in recent weeks to be interested in Packard Bell. That was likely the driving force behind Gateway exercising their first right of refusal. Lenovo likely made an offer, requiring Gateway to execute the option or risk losing control of the company.
Acer ends up adding a floundering Gateway and Packard Bell, with limited market penetration, mostly in Europe. The acquisition seems strange from Acer’s perspective, but is great for Gateway shareholders. They’ll surely tender their shares, which beyond regulatory approval, is about all that needs to happen for this deal to close. It remains to be seen if Acer can breathe life into a Gateway brand that has struggled in relative obscurity for the last few years.
UPDATE: Acer’s tender offer to purchase Gateway would immediately double Acer’s market share worldwide, creating the third largest PC manufacturer with 10.8 percent of the market behind HP (23.6 percent) and Dell (28.4 percent). Lenovo, which currently holds the No. 3 spot in the marketplace, will slip to the No. 4 spot.
On a worldwide basis, the Acer-Gateway-Packard Bell merger would push Taiwan’s Acer ahead of Chinese rival Lenovo in terms of market share and global unit sales. When you put it that way, Acer’s purchase of the less-than-successful Gateway and Packard Bell brands makes much more sense.
Looks as though Acer and Gateway have been mapping out their investment in each other. There is more information on the deal and specifics for the future in a PDF file they have posted, check it out here. This merger could bring about some new tablets or even UMPCs.