A Closer Look at Actuate's Fluctuating Tender Offer Price

| About: Actuate Corporation (BIRT)

JMP Securities LLC analyst Patrick Walravens has more on Actuate Inc.'s (NASDAQ:ACTU) ever-changing $60 million tender offer and the $3.50 a share, $212 million acquisition offer it received last week. In a meeting at the business intelligence software maker's headquarters on Friday, Walravens learned that Actuate had received the unsolicited offer last Wednesday, but management felt that the bid was too low and under normal circumstances would not have had to disclose the offer. However, since there is an active tender, the company was required to reveal the offer.

When Actuate first announced the tender offer Nov. 3, the price was between $3.15 and $3.40. Later, the company "amended" the price to between $2.20 and $2.60 before upping it to between $3.00 and $3.50 in response to the unsolicited bid and to "investor feedback."

Walravens does not address whether he expects another higher offer for Actuate to emerge. He writes that as of early Friday, the company had not had any discussions with the bidder. In the meantime, the $3.00 to $3.50 tender offer stands. He says Actuate claims its motivation for the tender was to provide a way for shareholders who needed liquidity to get it, but not transfer too much value to exiting shareholders at the expense of its loyal ones.

Walravens says shares of Actuate represent good near-term value based on the tender and long-term value based on what he says is its "sticky maintenance stream." His $4 price target represents a 2.5 times 2008 maintenance revenue estimate, which he contends is "very modest" based on historical standards. Early Monday, shares of Actuate were trading at $2.91. - David Shabelman

See Dec. 4 press release from Actuate
See Dec. 5 post from Tech Confidential
See Dec. 4 post from Tech Confidential