December 22, 2000 2:10 PM PST

Netpliance executives make bid to go private

A buyout group led by executives at Netpliance made a bid Friday to take the troubled Internet appliance maker private.

The group is offering 65 cents a share. That represents a 91 percent premium to Thursday's closing price of 34 cents but a price that is dramatically below Netpliance's 52-week high of $26.12.

The investor group includes chief executive John McHale as well as shareholders who hold a combined 52 percent of Netpliance's stock. Netpliance said it also expects other shareholders may join the buyout group.

However, the deal is subject to approval of a special committee of Netpliance's independent directors. Following the bid, Netpliance shares rose 64 percent, closing at 56 cents.

A representative of the Austin, Texas-based company was not immediately available for comment.

Netpliance is best known for pioneering the I-opener, a desktop Web-surfing appliance. However, the company said last month that it would get out of the business of selling the I-opener itself, instead focusing on helping other Internet service providers sell and manage I-openers and other Internet devices.

The I-opener was praised for helping to create the Internet appliance category, a segment that now includes Microsoft's MSN Web Companions, 3Com's Audrey and the Gateway-America Online Touch Pad.

Netpliance ran into trouble, however, as investors soured on its business model, which focused on selling the I-opener well below cost and making its profits from monthly Internet service fees as well as sales of accessories and a share of e-commerce revenue generated by Netpliance owners.

Netpliance has shifted its pricing scheme several times, charging anywhere from $99 to $399 for the unit. Netpliance also came under pressure when hackers found a way to turn the unit into a Linux-based computer, bypassing Netpliance's Internet service.

 

Join the conversation

Add your comment

The posting of advertisements, profanity, or personal attacks is prohibited. Click here to review our Terms of Use.

What's Hot

Discussions

Shared

RSS Feeds

Add headlines from CNET News to your homepage or feedreader.