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CDC Software withdraws offer to acquire Chordiant Software, sells all holdings |
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CDC Software Corporation, which had earlier proposed to acquire all outstanding shares of Chordiant Software, Inc., has changed its mind and withdrawn the offer while simultaneously selling its 1.3 per cent stake in the company. CDC withdrew its offer and sold its holdings in Chordiant after the latter issued a press statement rejecting CDC Software’s offer to acquire all the outstanding shares of the company. Peter Yip, CEO of CDC said, “Our announcement today not only reflects our disappointment in Chordiant’s decision, but also our frustration in the company’s lack of good faith efforts to open up a dialogue with us.” He said his company attempted to meet Chordiant management on multiple occasions “to discuss how CDC Software believes it could have helped improve the performance of Chordiant, which could have ultimately added value for their shareholders,” but were rebuffed by Chordiant management each time. Yip also said that several Chordiant shareholders and analysts proactively reached out to his company supporting the move to acquire Chordiant. “In fact, in a SEC filing earlier this week on January 12, one of Chordiant’s largest shareholders expressed disappointment over Chordiant’s actions on the proposal and noted that Chordiant should review strategic alternatives, including potential sales transactions,” Yip said. He said several antitakeover defenses adopted by Chordiant, including Delaware Corporation Law Section 203, were not exactly in the best interest of today’s Chordiant shareholders. “Generally speaking, some leading experts seem to agree that today’s antitakeover measures, particularly Section 203, severely limit unsolicited offers and some even question its constitutionality,” he said. Delaware General Corporation Law Section 203 generally prohibits an interested stockholder, which is defined as the owner of 15 percent or more of the corporation’s voting stock, or an interested stockholder’s affiliates or associates, from engaging in certain business combinations with a corporation that has publicly-traded voting stock, for a three-year period unless, among other exceptions, approval of the board of directors of the target company is received. Yip said despite the dissatisfaction over Chordiant, CDC was now operating from a stronger financial foundation is positioned to continue advancing its growth strategy through “both organic growth, as well as synergistic acquisitions of subscale software companies that we believe would complement and expand our product roadmap and solution offerings.” Referring to its recent profitability guidance, Yip said that it was increased for the second time since it was originally issued in August 2009. “Our increased profitability metrics were fueled by healthy organic growth, increased cross-selling opportunities and growth in all of our key vertical markets. That is why we are moving on to pursue other potential acquisition targets.” CDC Software had offered to acquire all remaining outstanding shares of Chordiant Software Inc. for $105.1 million, offering $3.46 per share, which represented a 21 percent premium to the average closing price over the last 30 days from January 5. On January 11, 2010 Chordiant Software said its Board of Directors unanimously determined that CDC's unsolicited, nonbinding proposal significantly undervalued the company and was not in the best interests of Chordiant’s shareholders. Steven R Springsteel, Chairman of the Board, President and Chief Executive Officer of Chordiant said, “We were surprised by CDC’s proposal given that there has been no prior acquisition-related dialogue between CDC and Chordiant. Notwithstanding that fact, Chordiant’s Board of Directors, with the assistance of its financial and legal advisors, reviewed CDC’s proposal. Our Board unanimously concluded that the proposal undervalues Chordiant’s leading customer experience technology platform and extensive base of enterprise customers. The proposal also does not compare favorably with the value that we expect to deliver to Chordiant shareholders as an independent company. Going forward, consistent with our policy, we do not intend to publicly respond to unsolicited acquisition proposals.” Morgan Stanley & Co. was financial advisor to Chordiant and Cooley Godward Kronish LLP was the company's legal advisor. |
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