eisa/OzEmail deal in doubt

The longterm effects of last month's tech stock crash are set to continue, with serious doubts now cast over ISP eisa's acquisition of OzEmail.

The doubts arose last week as spectators watched the deadline for the company to prove it could supply half the funds to purchase OzEmail pass quietly - despite a surprise remedial offering of $60 million to eisa from prospective shareholder Hastings.

Prior to the April meltdown, eisa announced it planned to provide funding for the OzEmail acquisition through partnerships with Fairfax online division F2 and ANZ, who each agreed to take a 5 per cent stake in eisa through subscribing to buy 20 million shares in eisa at $2 apiece. Hastings agreed to buy 50 million eisa shares at the same price, representing a 12 per cent stake in the ISP.

However, since the April bloodbath, eisa shares have continued to slide, leaving the company's estimated market value around one-third of that upon first announcing its intention to aquire OzEmail.eisa shares closed on Friday at $1.04, up 5 cents from Thursday's trading.

Conditions in eisa's deals with F2, ANZ and Hastings stipulated that the deals would only go ahead if they enabled eisa to purchase OzEmail. All parties are believed to have begun re-negotiations.

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