Large i2 Holder Pressures Company To Sell

Shares of i2 (ITWO) are sharply higher after investment group Amalgamated Gadget (coolest name ever, by the way) said the supply chain management software company ought to seek a buyer.

Amalgamated, which holds a 17.6% stake in the company via its ownership of the company’s Series B convertible preferred stock, has been invested in i2 since 2004. In an SEC filing Thursday, Amalgamated has switched to a more aggressive stance: for starters, the company said it will exercise its right to name two members to the i2 board. One seat will be filled by Michael Simmons, a former General Electric (GE) exec associated with the investment firm; the group plans to fill the other seat, and is searching for a candidate.

In the filing, Amalgamated says that it now believes that i2 “should explore strategic options, including a possible outright sale,” and that it “desires to participate in this process.” The investment firm adds that i2 is “too small to survive on its own in today’s environment, and that the value of [i2’s] assets cannot be maximized” while it stays independent. The filing notes that the company has recently suffered revenue and earnings shortfalls, and that it has lost both its CEO and chief customer officer. Amalgamated says i2 “should publicly announce and implement a strategic review and sales process with the utmost speed.”

ITWO 1-yr chart:

Comments

[SHARON T.:]

Eric,

Amalgamated is a hedge fund and the sole holder of i2's $107m prefer stock earning 2.5% interest.

Amalgamated will make 10% of that amout if i2 is sold, AT WHATEVER PRICE, and that was one of the term of the prefer stock.

Amalgamated will always be pushing for sale of i2.

I think many of i2's major institution shareholders now realize what's good for Amalgamated is not necessarily good for them.

2008 Apr 18 08:09 PM