eisa Suffers Another Setback in OzEmail Campaign

Internet Services Provider eisa's multi-million dollar bid to acquire Australia's second largest ISP OzEmail is in doubt after major content provider John Fairfax Holdings announced that its online subsidiary, f2, had ended its Memorandum of Understanding (MOU) with the company.

Fairfax was reported to be contributing AUS$40 million (US$24 million) in return for a five percent stake in the combined OzEmail/eisa organization, and the management and provision of content for the entity's Web site.

Fairfax has now retracted both agreements, casting speculation over eisa's financial ability to acquire OzEmail.

"The deal with eisa to purchase what is still an attractive asset - OzEmail - and manage the portal was simply one possible route to continue our strategy of developing an increased number of effective distribution channels for our leading content and e-commerce businesses," said f2's chief executive, Nigel Dews.

Fred Hilmer, the chief executive officer of Fairfax, and chairman of f2, said it had become clear that the company's proposed deal with eisa could not be concluded on the terms and conditions that were in the best interests of f2 shareholders.

"The deal was unable to be restructured to our satisfaction. We have therefore exercised our rights to protect our interests by ending the MOU with eisa," said Hilmer.