M&A Daily: Lawson Likely To Get More Interest (LWSN, HPQ, ORCL, SAP, NOVL)

Banking, finance, and taxes

Published: March 16, 2011 12:01 pm

Last Updated: April 28, 2020 12:53 am

Lawson Software Inc. (NASDAQ: LWSN) is trading well above its current fresh $11.25 cash buyout from Golden Gate Capital and Infor. There is a reason… Investors believe more is coming. Carl Icahn has already said he agrees with a sale “to fetch the highest possible price” but no expectations were laid out.

Hewlett-Packard Co. (NYSE: HPQ), Oracle Corporation (NASDAQ: ORCL), SAP AG (NYSE: SAP) were all listed as possible rival bidders and a potential $13 to $15 value as being possible by Mergers & Acquisitions. Premiums to premium-buyouts are not new and this will not be the last such premium you ever see in technology M&A.

Our concern over the “premium” here is that valuations are already getting stretched for the current model. If the company can better transition to an SaaS model over a sale and install model easier as a private company without having to worry about shareholder values daily, then our concern over value is probably a bit too conservative.

We saw the same premium take place originally in Novell, Inc. (NASDAQ: NOVL), where a merger from Attachmate Corporation and Longview Software Acquisition Corp. at $6.10 per share has been approved by shareholders but is still pending its patent sale in the U.S. and Germany. This was higher than the prior Elliott Associates buyout offer.

In just the last two days we have witnessed Lawson shares pop from about $11.50 to above $12.50 before the market uneasiness took out some wind from the sails. Shares closed at $12.00 on Tuesday, and shares were closer to $10.00 before word of a possible sale surfaced.

JON C. OGG

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