Vantive's plan protects stockholders

The software maker is circling the wagons to shield its shareholders against a hostile takeover, if one should come.

2 min read
Vantive is circling the wagons to protect its stockholders against a hostile takeover.

The Santa Clara, California, maker of sales force and marketing management applications announced today it is putting into effect a stockholders protection plan that will ensure shareholders get their money's worth should there be a hostile takeover.

"The adoption of the plan is intended as a means to guard against any potential use of takeover tactics designed to gain control of Vantive without paying all stockholders full and fair value," said Vantive executives in a prepared statement. "The distribution of the rights is not in response to any proposal to acquire Vantive. The board is not aware of any such effort."

But what the board is aware of is that the front office software market is ripe for takeovers, and Vantive is one of the ripest fruits on the vine. Vantive was trading at about $8 a share today, down from a year-high of $39.75.

"It's going to be tough for these [front office vendors]," said Steve Bonadio, analyst at the Hurwitz Group in Framingham, Massachusetts. "Look at [supply chain software vendors] Manugistics and I2 as the model for the front office guys. It's not a very bright future for them."

I2 and Manugistics are both struggling to fight off the ERP encroachment into their territory. Both have suffered sales slumps as a result of SAP and the others taking on their markets. In fact, Manugistics recently announced it was laying off people in an effort to recover from a $8.2 million loss.

And analysts say both the supply chain and front office markets are due for consolidation as companies look for ways to compete by getting bigger and expanding their product offerings.

For the front office vendors, the acquisitions have already begun. ERP leader SAP bought European firm Kiefer & Veittinger to stretch into the front office. And Baan last year bought one of Vantive's leading competitors Aurum Software.

The customer service, sales force, and marketing management on one end and supply chain management on the other are the two new battlegrounds for ERP vendors looking to expand their stretch in corporate computing environments.

PeopleSoft was rumored to have its eyes on Vantive but has since backed off its close alliance with the firm by expanding its front office partnership include Vantive arch rival Siebel Systems.

Under Vantive's protection plan, stockholders will receive one right to purchase one one-thousandth of a share of a new series of preferred stock for each outstanding share of Vantive common stock held as of the close of business on December 15.

The rights are to initially trade with the common stock and become exercisable to purchase the portion of the preferred stock, at $75 per right, when "someone acquires 15 percent or more of Vantive's stock or announces a tender offer which could result in that person owning 15 percent of the company's common stock."

The rights expire in 10 years.