Selectica’s board said the proposal was inadequate from a financial point of view and was not in the best interests of shareholders. Privately owned Trilogy is offering $4 per share in cash on condition that Selectica drops out of the acquisition agreement it had previously made with I-Many.
In December last year Selectica announced its intention to acquire I-Many for $1.55 per share in cash, a move that was unanimously approved by the board and was expected to close in the first quarter 2005, subject to shareholder approval.
A month later, I-Many’s largest shareholder Diker Management LLC revealed that it would be voting against the proposal, saying the $1.55 offer undervalued the company. Trilogy took advantage of the dispute to put its own offer in, assuming that the Selectica/I-Many deal would not go ahead. The I-Many shareholders are expected to vote on the Selectica offer later this quarter.
Selectica and Trilogy are direct competitors in the online sales configuration and pricing niche of the CRM market, whereas I-Many offers complementary contract management capabilities.
While the Selectica/I-Many proposal would bring two weak but specialist players together and extend the functionality of the resulting application, the Selectica/Trilogy bid is more of an attempt by the large, financially backed, privately owned Trilogy to grow market share by taking a competitor out of the market.
The rivalry between Selectica and Trilogy is well established and they have patent infringement claims against each other. The two compete with other specialist configuration players such as Firepond, Comergent Technologies Inc and Azerity.
