Register.com Nabs .PRO Domain

Register.com has announced a $16.9 million bid for competitor and partner Virtual Internet plc., a UK-based corporation and co-registrar of the .pro domain.

by Ryan Naraine of www.atnewyork.com [February 4, 2002]

Registrar Register.com, Inc. on Friday announced it would pay $16.9 million in a takeover deal for U.K competitor Virtual Internet plc.

Although the transaction requires the approval of 90 percent of Virtual Internet's shareholders, Register.com said the directors of Virtual Internet have already given the thumbs-up to the deal and have recommended shareholders accept the offer. "(They) have irrevocably undertaken to do so in respect of their own holdings, representing approximately 53.2 per cent of Virtual Internet's existing issued shares," the company said.

Virtual Internet chairman William Slee pushed for unanimous shareholder approval. "Having achieved much in the last few years, particularly with regard to our Net Searchers business, the Board considers that the Company will be better able to execute its strategy as part of the Register.com Group, which has greater resources and presence in complementary international markets."

Register.com said the offer represented a premium of approximately 35.7 per cent over Virtual Internet's closing price on January 31. Virtual Internet's shares are traded on the London Stock Exchange.

Chief executive Richard Forman said the takeover would allow his company a solid foothold in the U.K. and Europe, particularly in the corporate domain name services market.

More importantly, the deal would give Register.com sole control of the ".pro" domain name registry, which is being handled through RegistryPro, a partnership between Register.com and Virtual Internet. Once the deal is consummated, Register.com would control the ".pro" registry and still benefit from the registry for ".info," as part of the Afilias registrar consortium.

It would also include Virtual Internet's ShoutLoud.com subsidiary which was recently acquired. ShoutLoud is considered Europe's largest re-seller of domain names.

Despite being unprofitable, Virtual Internet has a solid customer base throughout Europe and Register.com hopes revenues from across the Atlantic would narrow the gap with the number one registrar Verisign.

In its most recent financial results, Virtual Internet posted a pre-tax loss of $7.2 million.

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