PeopleSoft Inc. (Nasdaq: PSFT) said Monday it will buy Vantive Corporation (Nasdaq: VNTV) in a stock for stock transaction worth about $433 million. In a separate release, Vantive said it will miss estimates in the third quarter by about 16 cents a share.
Shares in PeopleSoft, the maker of customer-care software were up 1/2 to 17 3/4. Shares have stumbled since PeopleSoft said its second quarter was as weak as analysts expected.
Vantive soared 3 9/16 to 12 1/2, or 39 percent. The stock has been ragged since investors slammed it for inconsistent results last quarter.
The terms of the deal call for an exchange of stock at a fixed ratio of 0.825 shares of PeopleSoft common stock for each outstanding share, warrant, and option of Vantive, and is anticipated to be accounted for as a pooling of interests. Based upon PeopleSoft's closing stock price of $17.25 on October 8, the value of the transaction is around $433 million.
The merger give the combined company an eBusiness package that builds on the products already developed over the companies' long-term partnership. Vantive's suite of customer-centric software will give PeopleSoft the ability to help companies generate more sales and offer higher levels of customer service., according to the press release.
Vantive and PeopleSoft products can already be integrated via Vantive QuickConnect for PeopleSoft, announced in August. PeopleSoft will unveil a combined product strategy for customer relationship management in early 2000.
In other news, Vantive warned it expects to report revenue of about $42 to $43 million, compared with revenue of $41.7 million in the third quarter of 1998. The company expects to report a net loss for the quarter of between 16 and 18 cents a share. First Call was expecting the company to break even. Vantive said it also had a restructuring provision of around $1.5 million pre-tax, or an additional net loss of 5 cents a share. Revenue from software licenses will be about $16.5 million for the quarter.