Hoping to lift the moribund company from its ashes last year, Raimus, an activist hedge fund, offered on July 5, 2006, to purchase 90% of Phoenix for $115 million or $5.05 per share. In a regulatory filing Jan. 3, Raimus expressed continued interest in the pursuit of its goal. Jan. 16, Raimus boosted its offer to $5.25 a share and Phoenix came short of rejecting the bid, but did say it wasn't interested in talking with the hedge fund.
Joining Ramius in its proposal last year was John Mutch, former CEO of San Diego software provider Peregrine Systems Inc. and managing partner of activist hedge fund MV Advisors LLC. In response to the approach, Phoenix hired San Francisco-based Savvian LLC to weigh its options.
WHAT THEY DO
Phoenix makes software that loads a computer's operating system when it is turned on. The company's customers include computer manufacturers such as Panasonic parent Matsushita Electric Industrial Co. Ltd. of Osaka, Tokyo-based Toshiba Corp., Beijing's Lenovo Group Ltd. (which acquired IBM Corp.'s personal computer division last year), Sony Corp. of Tokyo and Hewlett-Packard Co. of Palo Alto, Calif.
NEEDING HELP DESK
The company blamed the delayed launch of Redmond, Wash.-based Microsoft Corp.'s new Vista operating system, on inventory buildup in the PC market, compatibility problems with its security applications and pricing practices employed by previous management for its software licenses. On June 21, 2006, the company said it anticipated revenue for the third quarter of 2006 to be $10 million to $12 million, well below its previous guidance of $24.5 million to $26.5 million.
The month before, resident and chief executive Albert Sisto resigned. He said he wanted to spend more time with his family but the company he left behind was mired in problems. The company is now being headed by an operating committee and board to help with the new transition to the new successor. Turnaround whiz Woodsom Hobbs came on board as CEO in September.
Additionally, the company is adopting a new pricing plan that it expects to give it a more "sustainable and predictable" revenue stream, a company official told The Deal last year. In an effort to maintain its market share, Phoenix previously charged computer makers a lump-sum payment for its software licenses rather than getting paid for every product shipped. Current management indicated it expects to limit that practice.--Gerald Magpily
| Dealwatch executive summary |
The Date |
The Action |
| 2.09.07 |
Phoenix rallies support. |
| 1.16.07 |
Raimus betters its own offer by 20 cents a share. Phoenix says it isn't interested. |
| 1.03.07 |
Raimus stages proxy contest and says its still interested in a bid for Phoenix. |
| 7.13.06 |
Phoenix Technologies looks to Savvian to help weigh its strategic options. |
| 7.05.06 |
Ramius and a pair of investors make offer for Phoenix |
| 6.22.06 |
Phoenix lowers revenue forecast causing stock to nosedive 31% |
| 6.15.06 |
Minority owner Ramius urges the company to hire an investment bank to explore options. |
| 5.26.06 |
Sisto resigns as CEO and president. |
Source: The Deal |
After a failed attempt to acquire Phoenix Technologies Ltd. in 2006, Raimus Capital Group LLC kicked off 2007 with a proxy contest for representation on the company's board of directors, raised its hostile offer for the company to $116 million, was rejected, and then abandoned its target, which has been busy itself rallying support from proxy advisory firms.
