What’s going on with GeoOp

UPDATED: GeoOp shareholders approve $9m acquisition of InterfaceIT and Media barred from GeoOp meeting

MediaWorks isn’t the only company Mark Weldon might be relinquishing a top position from this week.

In Auckland tomorrow, GeoOp [NZX: GEO] shareholders will vote whether the company should merge with Australian mobile sales app developer InterfaceIT.

They will also decide on the appointment of InterfaceIT chairman Roger Sharp to the board. He will replace Mr Weldon as GeoOp chairman. Mr Weldon will stay on as a director.

Finally, the board may seek to reassure the company’s critics of its direction — GeoOp raised $10 million at $1 a share in November 2013, seeing shares soar as high as $3.31 but they have since fallen off a cliff, last trading at 28c.

Last month, an independent adviser said the pros of the merger with InterfaceIT “significantly outweigh” the cons. GeoOp has proposed to acquire InterfaceIT for $9 million in shares and convertible notes.

The deal would see the Australian company's owners hold about 32% of the merged entity, rising to as much as 64% if certain conditions are met in what Simmons Corporate Finance called a worst-case scenario for the GeoOp shareholders in its report on the deal.

The independent adviser valued InterfaceIT at between $6.1 million and $8.5 million and added $2.3 million to $4 million of benefits arising from a merger.

As part of the deal, GeoOp will give North Ridge Partners, one of InterfaceIT's vendors, a mandate to advise on a potential capital raising, which would coincide with or precede a listing on the ASX.

Simmons Corporate said if the deal isn't approved, GeoOp will need to raise new capital in the near future at its current spending rate.

GeoOp has fielded criticism from technology investors Ben Kepes and Aaron Bhatnagar, although the latter says the merger is a good move.

Adding to the Auckland-based company’s pains, it released the wrong half-year report in March, which it said was in fact an early draft.

GeoOp chief executive Anna Cicognani defended the company in January, saying it has been thriving since she became involved in March last year, improving revenue and reducing costs.

The most recent financial report shows a loss of $1.8 million, or 5.77c per share, in the six months ended December 31.

MYOB partnership will increase exposure
This week the company announced its software has become an add-on for accounting software firm MYOB.

The company says the deal will improve GeoOp’s exposure, putting it in front of hundreds of thousands of businesses in New Zealand and Australia.

Ms Cicognani says the company’s goal is to become a certified add-on with MYOB.

“We are happy to be associated with MYOB’s long history of producing excellent software, and we’re confident MYOB’s mobile workforce customers will take this opportunity to see what GEO can offer them,” she says.

(With reporting from BusinessDesk)

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