A $2.17 a share cash bid by shareholders unhappy with the performance of the integration software vendor was launched at the beginning of this month. They cited ongoing concerns over the value being delivered to Mercator shareholders as their main motivation.
CEO Roy King hit back saying the company had well-established strategies and an experienced management team in place that will generate value for stockholders. He said the bid would only serve to distract the company, its management and customers and waste resources that could otherwise be deployed to enhance stockholder value.
A meeting between the two sides on April 1 only increased the conflict. SSH’s CEO Rodney Bienvenu said in an open letter to shareholders that its suggestions for working together to deliver greater value to the shareholders had been rejected.
Mercator’s King claimed that the dissidents admitted at the meeting that they had not secured financing for the purported proposal and that they were not prepared to detail any other terms. He said that Bienvenu said that SSH’s intentions for the company involved a radical paradigm shift that would require re-engineering Mercator to a unique and extremely risky strategy.
Whatever the truth of the matter, loss-making Mercator has been in decline for some time now with revenue falling 12% to $126.3m in 2001 and dipping another 11.4% to $111.9m last year.
Source: Computerwire
