Badly battered Sensar (SCII) has announced that Nasdaq has nixed its proposed merger with the Israeli startup Net2Wireless, but it plans to appeal the decision.
The Salt Lake City-based Internet service provider and Web host, whose stock has fallen from near $90 in March to $1.50 intraday yesterday, first reported difficulties in executing the merger with Net2Wireless in mid-November after what it called unsolved issues concerning several of shareholders.
"We find none of the solutions offered by Sensar acceptable," Nasdaq management officially notified Sensar after Friday's close, adding that the company would be delisted if the merger goes through.
The point of the merger, from Net2Wireless' perspective, is gaining a Nasdaq listing through the back door.
Apparently fears that the planned merger was hanging by a thread began to spread among investors two weeks ago, when Nasdaq management said Sensar shareholders had not been able to resolve legal problems over their holdings in other companies.
Yaron Sobol, Net2Wireless general adviser, would not discuss the company's views on the merger or on any appeal.
Questions about the company seemed to annoy Sobol. Net2Wireless chairman David Rubner also refused to comment or to answer questions.
Both in its announcement Monday and in the one two weeks ago, Sensar shed no light on the basis of the Nasdaq decision. It did say, though, that in spite of troubles with shareholders, the companies intend to go ahead with the merger.
Sensar also announced a month ago that
had decided against investing $32 million in Net2Wireless.
The company now trades at a market cap of $10 million -- down from a high of $3 billion -- which reflects a market value of $42 million for the merger.
It's a hard blow for investors who had hoped to get a piece in the promising Net2Wireless by buying Sensar. Net2Wireless is a specialist in data compression technology that enables faster cellular data transfer and faster Internet access, would reap high rewards after the merger.