Platinum sues BMC and Boole & Babbage over merger deal

Platinum Technology is waiting to hear a court?s verdict on its temporary restraining order to prevent rival BMC Software from buying Boole & Babbage, following its own previous negotiations with the supplier.

The move is the result of BMC?s announcement last month (see VNU Newswire, 2 November, 1998) that it intended to acquire Boole & Babbage in a $900 million stock swap, and the first hearing was held on Wednesday in a Circuit Court of Dupage County, Wheaton, Illinois.

Platinum claims that Boole is in breach of an agreement it signed in mid-August, which entitled the systems management vendor to 120 days of exclusive and confidential merger negotiations. In return, Platinum attests, it agreed not to try and buy the company without the approval of Boole?s board of directors.

Larry Friedman, senior vice president of Platinum?s general council, said: "Boole & Babbage agreed it would only talk to us for 120 days about merger, so we were surprised when we woke up on 2 November and saw the BMC bid. Boole & Babbage is simply saying it?s in the best interest of their shareholders, but BMC is saying it?s as surprised about the situation as anyone on the planet and it had no idea."

However, he continued, the firm sued BMC as well as Boole for tortuous interference because at the time it believed the documents Boole allegedly signed would have come to light during due diligence.

""We filed for temporary relief so that we won?t trigger the deal protection clauses in BMC?s contract. These include a break-up fee and an option to acquire between 19-20 per cent of Boole & Babbage, at below the market price. This would prevent any other company from going for a pooling-of interests agreement, which limits the number of people that could top the BMC offer. Only a few companies in this market could just write a cheque," he added.

The firm plans to sue for damages if it does not win its temporary relief order, although it acknowledges such damages would be difficult to quantify.

BMC and Boole refused to comment, but the final hearing is scheduled to take place between 6-8 January.