Partners For A Decade, Bridge Information And Pont International Prepare For Combat As Agreements Expire

Restrained by agreement from talking about their entanglement, Bridge Information Systems, Inc. and Pont International Ltd. are quietly biting their tongues until January 1st, when their cease-fire formally expires. The two firms, once cordial partners, are about to become fierce competitors in the institutional market for value-added equity analytics, a market now dominated in the U.S. by Bridge.

Executives at Bridge and Pont won't discuss their rift or their plans, but much of the story has been pieced together from sources who ask not to be identified, and from various documents. In a nutshell, a decade after setting up an arrangement for Pont to capitalize and market the Bridge service internationally and in turn to provide Bridge with international market data, the two companies will be competing with each other in the U.S. and abroad and, most likely at first, offering very similar information services.

Pont International, formerly Bridge International, is a London- based holding company headed by Greg Moore, with over a dozen local subsidiaries scattered around the globe. The company was founded in the late 1970s as a venture between Bridge Holding Co. and Moore, with each having a 50 percent share. Moore subsequently sold a minority interest to a group of Middle Eastern investors.

The international company was also apparently founded -- and run for years -- on little more than a handshake. Bridge's 1987 Regulation A offering statement (MTR, January 1988) called it an "informal" arrangement. "No written contractual agreements had been prepared," it says. Until late 1986, however, this arrangement seemed to suffice.

Sometime between September 1986, when Bridge was preparing an abortive initial public offering, and July 1987, when Bridge and Moore signed the documents that began the 18-month unwinding of their relationship, something happened. As the 1987 offering statement says: "From time to time, disputes had arisen between Bridge and [Moore's] International Group concerning rights to software used by the International Group, the ownership of the International Group and other aspects of the business relationship."

What triggered these disputes isn't known, but their timing seems to coincide with the departure of Bridge Holding president Jim Yates (MTR, September 1988), who is said to have made the original deal with Moore. Yates left Bridge in late 1986 after voting his shares against the IPO, effectively vetoing it. Yates, who is in litigation with Bridge, declines to discuss Bridge or Pont.

The July 1987 agreement between Bridge and Moore, along with subsequent agreements, provides for the following:

No cash changes hands.

Moore gives up the right to use the name "Bridge" (choosing instead "Pont," the French synonym).

Bridge gives up its ownership interest in Pont.

Bridge and Pont agree to grant access to each other's databases and proprietary software until January 1st, 1989.

Bridge and Pont agree not to compete with each other until January 1st, 1989.

Bridge and Pont agree to divide their customer bases along geographic lines as of January 1st, 1989, with Bridge retaining domestic customers and Pont retaining international customers.

Bridge and Pont agree to provide each other with "certain databases and software" as of January 1st, 1989.

The outcome of all of this will be known in a matter of weeks, when switches will be thrown, files will be dumped, and any remaining links between Bridge and Pont will be severed. Pont will have no U.S. customers and will have a new global competitor. Bridge will have no international customers and will have a new domestic competitor. Each will have to fend for itself in acquiring and processing market data domestically and internationally. And each will try to make the change as transparent as possible to its customers.

To that end, Pont has built a data center in Chicago and hired Gary Knight, former president at the Intermarket Clearing Corp. to run Pont Data, Inc., its U.S. unit. Bridge, meanwhile, is finishing work on its data centers in Watford, England and Hong Kong, which will support future overseas customers and collect prices to feed back to the U.S.

One firm in particular could be caught in the crossfire. PC Quote, Inc. has both Bridge (MTR, November 1985) and Pont (MTR, May 1986) as shareholders, and has joint product and marketing deals with each -- PC Bridge and PC Quote International. Nonetheless, PC Quote chairman Lou Morgan isn't worried. "There is nothing that would adversely affect PC Quote," he says. "I am currently in a comfortable position and I'm friendly with both companies."