Loudcloud investors OK managed services sale to EDS
SUNNYVALE, Calif., Aug 9 (Reuters) - Loudcloud Inc.<LDCL.O> shareholders have given the green light to the $63.5 million sale of its Web site management unit to Electronic Data Systems Corp.<EDS.N>, according to a preliminary tally of the vote announced Friday at a special Loudcloud shareholder meeting.
The deal's target closing date is Aug. 16, Loudcloud's Chief Financial Officer Ron Sherwood told Reuters.
At around the same time, Loudcloud will change its name to Opsware Inc. and file to swap its current Nasdaq ticker symbol for OPSW <OPSW.O>, reflecting the company's intention to focus on its existing software business, Sherwood said.
About two dozen shareholders gathered at a hotel in Sunnyvale, California, for the special meeting. Among them was retiree David Scheid, who said he owns several thousand Loudcloud shares -- some of which he purchased earlier in the day.
Scheid said he backed the sale, calling it a positive for the young company, which went public in 2001 at a price of $6 per share and now trades around $1.
"It puts them into a higher-margin business and gives them cash, which is key to survival," he said.
Prior to the EDS deal, Scheid said, the company's survival was a question.
In its brief history as a public company, Loudcloud has been forced to slash head counts and expenses in an effort to cool its cash burn and preserve capital. In June, it posted a fiscal first-quarter net loss that shrank 50 percent to $30.4 million as total revenue rose 50 percent to $17.4 million.
Loudcloud co-Founder and Chairman Marc Andreessen owns 10.5 million Loudcloud shares -- about 7.4 percent of Loudcloud's outstanding stock -- and said he will continue working full-time at the software shop.
"I'm hugely incented, from a personal standpoint, to work on behalf of the company," Andreessen said.
08/09/02 16:23 ET
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