Wednesday, August 23, 2006

Former eMachines Owner Bids For Gateway Retail

Lap Shun Hui, the former owner of eMachines and current owner of Joui International, said late Tuesday night that it is proposing to acquire Gateway's retail operations for $450M. In a letter to Gateway's board which was released last night, Hui said that he was disappointed that Gateway has chosen not to "constructively engage" with Hui and his advisors. Hui said that he has a fundamentally different view of the current PC environment and what it takes for a company to be successful. Hui is looking for Gateway to separate its retail operations from its other businesses. Hui also suggested he would be willing to acquire all of Gateway's outstanding shares in order to accomplish the split. Among the items cited by Hui were the difference in sales strategies for the channels, the use of the retail business to subsidize its other businesses, and excess overhead expenses.