Invensys is on course to complete its acquisition of Baan next month, despite getting less support than it had hoped for from Baan's shareholders.
The UK firm said that at the expiration of its offer on 25 July it had control of around 75 per cent of the Dutch software vendor's stock, represented by acceptances from shareholders to acquire 134 million shares and completed purchases of a further 66 million shares. But the amount still falls short of the 95 per cent acceptance rate it had hoped for by yesterday's extended deadline.
Invensys has now amended the conditions, but not the price, of its 2.85 euros (£1.78) a share offer - which values the acquisition at around £474m - and set a new deadline of 1 August.
Under the new terms, Invensys said it will take on all of Baan's assets and liabilities, assume management control of the company and arrange financing to secure its immediate future.
Invensys' plans include liquidating the Baan holding company within 12 months subject to shareholder approval at an emergency general meeting scheduled for 15 August.
Allen Yurko, chief executive at Invensys, said: "The situation at Baan required decisive and immediate action. We re-examined the case for acquiring Baan and, in the process, considered terminating the offer. However, we remain convinced that this deal is in the best interests of Invensys' shareholders, but only if we can fully integrate its operations into our new software and systems division."
The company said it will continue to purchase shares for another 20 working days after the 1 August deadline, provided it controls 50 per cent plus one share of Baan stock at the deadline. Shareholders who fail to meet this deadline, it said, will be paid 2.85 euros per share, without interest, when Baan is liquidated in 2001.
The takeover had been obstructed by a block of investors claiming to own just under 20 per cent of Baan. Using the baaninvestors.com website, the investors have been promoting the argument for a four-week extension to Invensys' 25 July offer.
By its own admission, however, Baan faces bankruptcy if the Invensys deal is not completed. The troubled software company last week reported it would suffer an operating loss of between $85m and $95m for its fiscal second quarter, on revenue barely expected to reach $80m, compared with sales of $106m in the first quarter of 2000, and $130m in the fourth quarter of 1999.
Rob Ruijter, Baan's chief financial officer, blamed a "wait-and-see attitude about the company's viability" for the decline.
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