UPDATE: eisa snares OzEmail with mystery funds

Eisa's prized purchase of OzEmail may be signed and sealed, but funding arrangements for the acquisition are still being finalised.

Robert Crossman, head of investment banking at eisa's financial advisor Hartley Poyton, said the company was considering a number of options, including the involvement of strategic investors to pay for the multimillion deal.

Eisa snared the hotly contended consumer business arm of OzEmail, owned by UUnet, from Telstra late Thursday, after first flagging an interest in the ISP before Christmas.

Damien Brady, CEO of eisa, said the cost of the acquisition, which includes the purchase of OzEmail's 350,000 customers, content and assets is between $300 and $350 million.

Brady would not indicate whether eisa's offer was higher than Telstra's unsuccessful $300 million bid which was derailed by consumer watchdog, Australia Competition and Consumer Commission (ACCC) as anticompetitive and "unfavourable".

"We believe our purchase price is very competitive with Telstra's," he said.

Brady said the combined organisation is expected to have in excess of 400,000 customers, knocking Telstra Big Pond from the top spot as Australia's largest ISP and increasing competition in the marketplace.

"Number two and number four have joined forces to take on number one," Brady said.

"We will move quickly to take on Telstra."

According to Brady, the two companies will continue to use existing brand names in the short term, with OzEmail being the core brand.

"OzEmail is a significant brand, we would like to see that brand continue . . .we will let the customers choose what brand they prefer," he said,Whilst admitting eisa's acquisition of OzEmail is "certainly very large", Brady said eisa would not close the door to other prospective partners.

"If other opportunities exist to pursue, then we will," he said.

Meanwhile, eisa also announced today a strategic alliance with Vodafone Australia for the implementation and development of WAP (wireless applications protocol) services and applications.

Under the deal, Vodafone customers will gain access to eisa's ISP services (including OzEmail services) such as news content and e-commerce solutions.

Eisa/OzEmail customers, in return will be provided with WAP services, bundling opportunities and wireless content in the future.

Andrew Bissex, managing director of Vodafone said WAP services are likely to introduced by Vodafone later this year, but could not detail any services.

Bissex said Vodafone had been in discussion with eisa for sometime, but the acquisition of OzEmail made the Internet company a "more attractive" partner.

Despite having a non-exclusive deal with eisa, Bissex said Vodafone is "unlikely" to form partnerships with other ISPs.

"[Eisa's acquisition of OzEmail] is so powerful we will be truing to execute as much as possible from it," he said.

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More about Australian Competition and Consumer CommissionBig PondISP ServicesOzEmailTelstra CorporationUunetVodafone

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