More Bids for Openwave Coming?
Hedge fund Harbinger unveiled a proposed new board of directors for the Redwood City, Calif.-based mobile software company late Thursday and is pushing the firm's shareholders to accept its $7.10 a share offer for a controlling stake in the company. The existing board of directors has so far rejected Harbinger's advances and urged shareholders to do the same. (See OpenWave Rejects Advances.) Harbinger's tender offer, which would give it an overall stake of 62 percent in the company, closes on June 21st. The hedge fund had originally offered $8.30 a share for Openwave. When the current board of directors announced a restructuring plan and a cash dividend of $1.20 a share earlier this month, Harbinger had adjusted its offer accordingly.
Openwave said on June 5 that it had failed to find another buyer after informal talks with several interested parties. The word on the street has been that Sybase Inc. was the leading contender to buy, with HP Inc. (NYSE: HPQ) and a "European hardware giant" also informally mulling bids. (See Sybase Leads Openwave Pack.)
A financial source, however, says that June 5 deadline created by Harbinger's unsolicited offer put undue pressure on others looking at bidding for the company who hadn't completed due diligence yet. "There were a lot of unanswered questions," he tells Unstrung. "Openwave attracted significant interest but they just couldn't close the deal in time."
"There is a high chance that these parties will be back once Openwave completes restructuring, pays the dividend, and files its 10K," the source says. This would mean that interested parties could start talking again within a couple of months.
"Sybase wants to see what happens with the Harbinger tender offer," notes another financial source.
Openwave's board has been against the Harbinger buyout plans from the start but might soften if the hedge fund sweetens the deal with more cash, our initial source says. "Harbinger is low-balling, there's no question," he says. "But if they can offer 10 to 15 percent more then management wouldn't stand in their way."
Harbinger hasn't returned calls about the latest round of rumors and Sybase has consistently refused to comment on what it calls "speculation."
Openwave's stock was trading up $0.16 (2.38%) to $6.88 in Friday trading.
— Dan Jones, Site Editor, Unstrung