Middleware vendor Mercator has rejected a $74 million hostile takeover bid by private investment firm Strategic Software Holdings, dismissing the approach as "unsolicited, un-financed and highly conditional".
Mercator, based in Wilton, Connecticut, received the $2.17 per share offer from Strategic Software Holdings on Monday, three weeks after the investment firm had threatened to nominate its own slate of directors to the company's board. The SSH offer represented a 40% premium over Mercator's $1.55 closing price on Friday
Roy King, Mercator's chairman, CEO and president, says: "It is our opinion that these dissidents cannot successfully complete what is a highly conditional, unsolicited hostile transaction. Actions like these only serve to distract the company, our management and our customers and waste resources that could otherwise be deployed to enhance stockholder value."
He believes that the dissidents have launched a proxy contest to gain control of the Mercator board either to sell the company to themselves as cheaply as possible or "to engage in what they called an "extremely risky" experiment with the company's business".
King alleges that on a 1 April meeting, Rodney Bienvenu, chairman of SSH, said that his intentions for Mercator involved a "radical paradigm shift" that would require significant re-engineering.
Mercator has recruited JP Morgan as its financial advisor and Jenkens & Gilchrist Parker Chapin LLP as legal counsel.