OpenWave Rejects Advances
There had been talk that Sybase Inc. could be waiting in the wings with an offer for the mobile phone software firm. A Wall Street source now says, however, that this deal is also dead and the bankers have collected their fee and left.
Openwave says it held discussions with an unspecified number of potential buyers between early March and May 15. "The Company made management presentations to, and engaged in discussions with, a number of interested parties," Openwave says in a statement. "Despite expressions of interest, no party ultimately emerged from the strategic process with a binding proposal to acquire the company."
Harbinger, which already holds a 13 percent stake in Openwave, had offered to buy 40,389,560 shares, about 49 percent of Openwave's outstanding stock, for $8.30 per share in cash, an offer that valued the mobile phone software firm at $684 million. Openwave described the offer as "inadequate."
Openwave notes that it "remains open to considering any full and fair offer to all stockholders," but says it will now concentrate on turning the company around.
To that end, Openwave is planning a major restructuring process that will see it reduce its headcount by about 300 employees, 20 percent of its total staff. That will save the company $50 million a year in operating expenses but incur a one-time charge of $20 million in the fourth quarter of this year.
The board has also approved a $1.20 per share one-time distribution of cash to shareholders that will cost the vendor $100 million in total.
On Friday, a source close to the proceedings suggested that mobile database and applications company Sybase could still make a bid for the company sometime soon. According to reports, Sybase had previously submitted a bid worth about $10.75 per Openwave share. (See Sybase Leads Openwave Pack.)
This afternoon Openwave is trading down 80 percent, or seven cents a share, at $8.65 on the news that it has failed to find a buyer. — Dan Jones, Site Editor, Unstrung