One day after a surprising surge in its stock price, wireless data company I3 Mobile Inc. announced it has signed a non-binding letter of intent with ACE*COMM Corp. to be acquired via a merger with ACE*COMM or a wholly owned subsidiary of ACE*COMM.
Shares of I3 Mobile were up more than 100 percent in trading Monday-or up about 58 cents to $1.14 per share. But following news of the merger Tuesday, shares of I3 Mobile fell almost 50 percent, dropping back to 70 cents.
I3 Mobile in March said it was in negotiations for a potential alliance, joint venture, sale or acquisition, but provided no details at the time. Some wondered if Monday’s massive stock activity-I3 Mobile’s trading volume was up to 10 million compared with the company’s average of 120,000-was due to stock trader maneuvering.
I3 Mobile and ACE*COMM have agreed to work together to enter into a definitive merger agreement as soon as practical. The letter of intent prohibits I3 Mobile from negotiating with other parties for a certain period, and the merger is expected to close in the fourth quarter 2003, at which time I3 Mobile stockholders will receive shares of ACE*COMM common stock.
“We are very enthusiastic about the progress of our discussions for a proposed merger with ACE*COMM. We believe that ACE*COMM’s management, product offerings and customer base are outstanding and that ACE*COMM is well positioned for market leadership and growth,” said J. William Grimes, chairman and interim chief executive officer of I3 Mobile.
