SYS-CON MEDIA Authors: Elizabeth White, Liz McMillan, William Schmarzo, Yeshim Deniz, Jason Bloomberg

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Microservices Expo: Article

Chuck Phillips and Infor Offer $1.84 Billion for Lawson; Contest Expected

Fasten Your Seatbelts, Folks, It May Get to e a Bumpy Ride

Very late Friday - 9:30 at night in New York in fact, when Japan was dominating the news - Lawson Software said it had gotten an unsolicited $1.84 billion takeover offer from privately held Infor and its owner Golden Gate Capital.

That was three days after Reuters reported on Tuesday that Lawson had hired Barclays Capital to assess its options.

Reuters ticked off its options as being HP, IBM, Microsoft, the avaricious Oracle, SAP, privately owned Infor and private equity firms. You can cross a couple of those names like IBM and Microsoft off the list on principle. IBM buying application software would be a change in direction.

Anyway, the important thing to remember about Infor is that ex-Oracle co-president Chuck Phillips is CEO there now, having been tossed out of Oracle to make room for ex-HP CEO Mark Hurd after Phillips had been embarrassed by some indiscreet billboards advertising his extramarital love life a few months before.

Larry Ellison watchers assume that because Infor is suddenly interested in Lawson that Oracle's CEO may be tempted to up the ante. And Phillips, they say, probably wants Lawson even more than he otherwise might because he knows Larry might want it.

Larry of course has a ton of cash, Lawson will be accretive anyway, buying it will add to Oracle's competitive mass against SAP, and Larry probably wouldn't mind paying a "spite premium" to leave Chuck standing at the altar.

That's if Larry thinks that the price Infor is offering is fair enough to justify the spite premium. If not, he's likely to say publicly that Chuck is foolishly overpaying for the place.

Ellison also probably wouldn't mind playing a round of "keep away" with ex-Oracle president-now-non-executive chairman of HP Ray Lane as a bonus, so it makes some sense for Oracle to buy it for the customers.

HP of course is under considerable pressure to add to its software position. HP's new CEO Leo Apotheker, the ex-CEO of SAP and a guy whose reputation Ellison tried to muddy recently, is expected to say so on Monday.

Infor's cash bid works out to $11.25 a share. Lawson's stock closed at $11.55 Friday, a relatively airy height for the multi-category, multi-industry enterprise software house and 2.5% more than Infor offered.

Last Monday, before Reuters reported it was in play, Lawson stock was at $9.88. Bloomberg figures its average price over the last 90 days has been $9.46, making the Infor offer a 19% premium. Bloomberg also notes that the average premium for software acquisitions over a billion dollars the last three years has been 30.3%.

Lawson said in its disclosure of the Infor bid that it was in discussions with Infor but warned that "there can be no assurance that any agreement will be reached," also indicating that Barclays - which it now admits hiring - may be trolling for alternatives.

Lawson held out the amusing possibility it might not sell at all. Who are we kidding here? Activist shareholder Carl Icahn owns around 10% of Lawson and will push to sell to the highest bidder.

Lawson, which did $736 million in revenue its last fiscal year ended in May, said it "does not intend to comment further regarding this matter unless and until an agreement is reached, discussions with Infor and Golden Gate have been terminated or the board concludes its strategic review." Reuters believed Tuesday that the so-called strategic review was in its early stages. One might translate strategic review to mean "how do we cash in on this consolidation craze."

More Stories By Maureen O'Gara

Maureen O'Gara the most read technology reporter for the past 20 years, is the Cloud Computing and Virtualization News Desk editor of SYS-CON Media. She is the publisher of famous "Billygrams" and the editor-in-chief of "Client/Server News" for more than a decade. One of the most respected technology reporters in the business, Maureen can be reached by email at maureen(at)sys-con.com or paperboy(at)g2news.com, and by phone at 516 759-7025. Twitter: @MaureenOGara

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