SPiN: Preliminary agreement for the purchase of Neokart GIS

SPiN (50.4% Prokom) informed about signing a preliminary agreement for the purchase Neokart GIS. The transaction would involve purchase of 51% now and the remaining stake would be purchased later with the price dependent on Neokart GIS results for 2006 and 2007. The transaction is subject to due diligence and is expected to be closed by the end of April. The price was not disclosed, however we estimate iy for be small and not exceed PLN 2m. As a separate development SPiN informed about its will to buy out minority shareholders of its subsidiaries Optix (66%) and Galkom (87.5%). In case of Opitx the value of the transaction is estimated by SPiN’s CEO for PLN 10m and is expected to be closed by the end of 2Q06. Both developments have been expected by us. Transaction with Neokart GIS has been negotiated since SPiN’s unsuccessful SPO in 2005 and have been delayed on valuation grounds. We do not expect this news to have material impact on SPiN trading. We reiterate our Hold rating for SPiN with a fair value of PLN 35.9 per share.