Shares of communications software manufacturer Openwave Systems Inc. plummeted 14% to $8.92 in AH trading Monday after the company announced it has rejected a bid from shareholder Harbinger Capital Partners and has not found any other suitors. Harbinger, which holds a 13% stake in the company, offered to buy 49% of the company for $8.30 per share in cash (approximately $335 million). In rejecting Harbinger's unsolicited partial tender offer, Openwave's board categorized the bid as "inherently coercive" and "inadequate." Openwave, which hired Merrill Lynch in March to help it explore strategic alternatives, said no other parties have submitted binding proposals. Openwave will now "focus its energies on implementation of the company's stand-alone plan," which is designed to generate savings of $50 million through a 20% staff reduction. The company will post a $20 million restructuring charge in Q4 connected to the workforce cutback. Openwave also announced it will pay a special dividend of $1.20 per share in order to return $100 million to shareholders.
Sources: MarketWatch, Reuters, TheStreet.com, Forbes
Commentary: Sybase, Oracle, Et Al Eyeing Openwave - Barron's • OpenWave: Shares Sag Despite “For Sale” Sign • Openwave: Activist Investors May Release Hidden Value - Barron's
Stocks/ETFs to watch: Openwave Systems Inc. (OPWV). Competitors: Comverse Technology Inc. (CMVT), Microsoft Corp. (MSFT), Nokia Corp. (NOK). ETFs: Internet Infrastructure HOLDRs (IIH)
Conference call transcripts: Openwave Systems F3Q07
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