ICL could be sold off by parent Fujitsu

ICL may face being broken up and sold off by its parent Fujitsu, unless the new chief executive it now needs to find can quickly turn the company's fortunes around.

The services giant announced last week (2 August) that it had shelved its plan to float the company on the London Stock Exchange, a move that it had once hoped would value it at £5bn, blaming "difficult trading conditions and the company's financial performance".

Having staked his credibility on the success of the planned flotation, chief executive Keith Todd resigned the same day. Richard Christou, previously ICL's director of commercial and legal affairs, has taken over as acting chief executive until a replacement for Todd can be found.

The choice of the new person at the helm of ICL will be critical to its future.

"It will need a top executive from outside the company, a real high-flyer," said Lionel Lamy, senior analyst at researcher IDC.

"He will have 18 months to make things work and get ICL into a position to float. If that fails, then Fujitsu will break up ICL and sell it off to recoup its investment," he added.

Elena Christopher, senior analyst at Gartner's Dataquest subsidiary, said: "What ICL needs now is a chief executive with a services focus - someone with a business process background who would have the skills needed to take them forward."

The key question will be Fujitsu's attitude to its subsidiary. "ICL would benefit from being broken up, but I believe it would be against the Fujitsu culture to allow that," added Christopher.

Robin Bloor, chief executive of analyst Bloor Research, said: "If anything, Fujitsu is more likely to sell ICL off in one piece. Then it's down to the acquirer to sell off the dead wood."

Most ICL customers are taking the question marks over ICL's next step in their stride.

"We have an enjoyable working relationship with ICL, but any business decisions that it makes is for ICL to comment on," said First Direct.

"It's business as usual - we have a long-term relationship with ICL and we are working together as usual," said Cable firm NTL.

"We would be sorry to see ICL go - but not surprised," said a spokesman from local government technology user group the Society of IT Managers. "We would be sad to see it disappear, but ever since it was acquired by Fujitsu there have been questions."

Christou was not available for comment, but told staff in a letter soon after Todd's departure: "I know that ICL has a strong base and that in focusing absolutely on business and financial performance we can achieve very positive results."

An ICL spokesman told Computing: "Categorically, there will be no breakup and sale of ICL."

ICL's flotation timeline

May 1997: Chief executive Keith Todd confirms that ICL will float in 2000

May 1999: The government abandons the smartcard element of the Pathway Post Office automation project contracted to ICL. The company writes off £180m spent on development

July 2000: ICL says its flotation will go ahead even though the scheduled flotations of its online training arm KnowledgePool and Finnish subsidiary Invia have been delayed

August 2000: ICL announces that its flotation has been cancelled.