Will Oracle Outbid Infor for Lawson Software?
The $1.8 billion that Infor and Golden Gate Capital agreed to pay to buy St. Paul-based Lawson Software might not be enough to snag the company as reports swirl that Oracle Corporation may come in with a higher offer.
Bloomberg reported Tuesday that the $1.8 billion offer will probably get trumped by a higher bid from another company-with Oracle Corporation as the likely contender.
“You have the possibility of an increase from Infor or the possibility of a competitor coming in,” Abigail Hooper, a managing director at New York-based Havens Advisors, LLC, told Bloomberg. “There's been speculation from the beginning that Oracle may be interested.”
Shares of Lawson Software have risen 6.2 percent above the $11.25 per share offer that Infor and Golden Gate Capital made earlier this month.
According to Bloomberg, Oracle would profit from Lawson's medical records and supply-chain management businesses, which analysts say will help the company achieve record-breaking earnings this year.
Oracle, which is based in Redwood Shores, California, specializes in developing and marketing hardware systems.
A bidding war, according to Bloomberg, would also increase the amount of money that investor Carl Icahn would make on the deal.
Icahn acquired an 8.5 percent stake in Lawson last May. Regulatory filings indicated that Icahn purchased the 13.8 million shares believing that they were undervalued. He then upped his stake in the company in October, increasing his shares to about 16.9 million, or roughly 10 percent of the company-making him the single largest shareholder, according to regulatory filings.
Rumors regarding a possible buyout of Lawson began earlier this month, which resulted in a 13 percent increase in the company's stock price. The rumors were put to rest days later when the company confirmed it had received an unsolicited proposal to be bought by Alpharetta, Georgia-based Infor and San Francisco-based Golden Gate Capital.
On Thursday, Lawson reported that its third-quarter profit increased significantly to $21.4 million, or 13 cents per share, compared to $1.7 million, or 1 cent per share, last year.
The company said that improvements in operating income, a $3 million gain from a bankruptcy settlement, and a $1.2 million gain from the sale of marketable securities accounted for most of the increase.
Sales for the quarter, which ended February 28, were up 5.4 percent to $196 million.
The company canceled its previously scheduled conference call and instead issued an accompanying statement to its third-quarter financial results. In that statement, Lawson said that it would not provide any financial guidance because of developments surrounding its possible sale. The company did not disclose any additional information about its potential sale in the accompanying statement.