The investor group paid $23.3 million for its stake and plans to hold the shares for investment purposes, according to a Securities and Exchange Commission filing. Sybase has undergone tough times from falling from its number-two position as a database maker to fighting back three consecutive quarterly losses.
Under the acquisition terms, Soros will hold 1.8 million shares for his own account, while two funds managed by his New York-based Soros Fund Management--Quantum Partners and Quantum Industrial Partners LDC--will hold 376,400 shares. Together, this represents a 2.85 percent stake in Sybase. Officials with Soros Fund Management declined comment on the reasons for their investment in the troubled company.
Purnendu Chatterjee, a New York-based investment manager who acts as Soros's partner in several investments, also bought into the deal. He will hold nearly 1.76 million shares for a 2.3 percent stake.
Chatterjee's shares are held through Winson LDC and Winston LLC funds, which he manages. Those shares are also held for investment purposes.
"I'm glad they have confidence in the company. We have regular communications with the funds and...they are active followers of technology companies," said Mitchell Kertzman, Sybase chief executive. (Kertzman is a board member of CNET: The Computer Network).
The move by Soros has left some analysts baffled. "I'm not sure what Soros is looking at. He may be playing Sybase as a take-out candidate. There's been a lot of rumors that a foreign company, or possibly, CA may buy them out," said Jim Moore, an analyst with Alex. Brown.
Sybase recently fell from its number-two database software vendor spot, as Informix Software gained ground.
Sybase also reported a $52.6 million loss for the third quarter, which was largely due to a restructuring charge. The company, however, was able to improve its operating profits as it reduced expenses--boosting profits to $600,000, compared with $100,000 a year ago.
Sybase shares have been virtually flat for more than a month, with a share price of around $18. But today, stocks were up nearly 14 percent. Sybase closed at 20-1/2, up from 2-1/2 from the previous day. Soros and his investment group made their filing Monday.
The group purchased 1.34 million of the shares between October 3 and November 21, with the stock price ranging from more than 13 points a share to 19-1/2.