Internet Service Provider eisa's beleaguered plans to operate OzEmail's residential business were struck with the final blow today as OzEmail owner UUNet announced its decision to terminate the Memorandum of Understanding (MOU) under pinning the proposed AU$325 million buy-out.
eisa is likely to loose a non-refundable deposit of AU$20 million, made to UUNet to secure the acquisition.
UUNet's verdict came only days after the online division of newspaper publisher Fairfax, f2, decided to pull out of it's AU$40 million bid to operate an associated portal. F2 would have secured five percent of the venture.
UUNet's reasons for ending the MOU were due to eisa's "failure to meet the financial commitments supposed to be in place last month."
Since the deal to acquire Ozemail was launched in March, eisa's market value has hit the floor, with shares starting at AU$2.60 at the beginning of April and plummeting to a shocking low of 29 cents -- during morning trade today.
UUNet has already been contacted by potential bidders looking to eisa, with Fairfax itself cited as a lead contender according to some commentators.
Last night eisa Chairman John Pascoe and fellow director Michael Ball both quit the ISP due to medical reasons.
Investment group Hastings Funds Management and ANZ Banking Group each had separate funding deals with eisa involving the ISP's plans for OzEmail. Yesterday the two financials were renegotiating their deals -- no doubt derailed by UUNet's move today.
