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Register.com said the cash offer has been made on its behalf by Altium Capital. The company also claims it plans to take Virtual Internet private, "as soon as it is appropriate to do so."
The statement by the companies on Friday follows more than a month of discussions about a possible deal. Discussions broke down last week due to what the company called "issues arising from the due diligence process." The company said on Friday that those issues had been resolved and that the deal would now proceed, but Virtual Internet's announcement of the termination of talks last week sent its share price plunging 40 percent.
Virtual Internet has suffered following its attempted expansion into mainland Europe, and in October announced a strategic review that entailed the closure or sale of all its continental businesses as it returned to focus on the UK. On Friday Virtual Internet finally revealed the extent of its full-year losses for the year ended 31 October. Including exceptional items the reported pre-tax loss was STG19.7 million, more than double its loss the previous year.
As part of the deal announced with Register.com, William Slee, Ajay Chowdhury and Jason Drummond will all resign from Virtual Internet's board, although Drummond will stay on part-time. Register.com also said it intends to re-register Virtual Internet as a private company if the sale is approved by shareholders.
The deal will mark Register.com's first real entry to the UK market. Register.com's chief executive officer Richard Forman said the deal would help the company's growth in the UK and Europe, particularly in the corporate domain name services market.
In addition to domain name registration and hosting services, Virtual Internet also offers services that aim to help companies protect their brands and trademarks on-line, but Register.com said that if the sale goes through, it intends to review the strategy of each of Virtual Internet's businesses.
Virtual Internet's shares have traded as low as STG0.14 and as high as STG1.40 in the 52-week range.
Register.com reports its fourth quarter and full-year results on 11 February and is expected to show earnings per share of around USD0.09, according to Thomson Financial/FirstCall.
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