EOH tumbles as Microsoft moves to pull resale licence

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EOH tumbles as Microsoft moves to pull resale licence


Shares in information technology services company EOH plunged on Tuesday as the company announced that software multinational Microsoft planned to terminate its channel partner agreement with EOH Mthombo within 30 days.

The impact on profit of no longer being a direct reseller will be about R10-million in the current financial year, EOH said in a statement.

EOH stated that it had initiated plans to minimise disruption to customers and limit the potential impact on the business, until more clarity had been obtained. EOH has not been provided with any reason for the notice of termination, it said.

“Microsoft remains an important part of EOH’s network of the more than 50 technology partners within the EOH Group, and resolution of this matter is a priority. EOH Group CEO Stephen van Coller is actively engaging Microsoft to better understand and resolve this matter as soon as practically possible,” the statement said.

EOH’s stock tumbled as much as 34% following the announcement to a new 52-week low of R17.55 a share, from the previous day’s closing price of R26.71 a share. By 14:15, the company traded at R19.98 a share. 

EDITED BY: Mariaan Webb
Creamer Media Senior Researcher and Deputy Editor Online



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