Here's the article:
If the Board feels so confident why is the stock 14-16 in the last three weeks? Will Wall Street puke on this or what?
peter
CHEYENNE SOFTWARE, INC.’S BOARD
UNANIMOUSLY REJECTS MCAFEE’S
UNSOLICITED REQUEST TO DISCUSS MERGER
ROSLYN HEIGHTS, NEW YORK, (April 15, 1996) -- The Board of Directors of Cheyenne
Software, Inc. (AMEX:CYE) of Roslyn Heights, New York, announced today that it has
unanimously rejected an unsolicited request from McAfee Associates, Inc., of Santa Clara,
California, to meet to discuss a potential stock-for-stock business combination between Cheyenne
and McAfee.
ReiJane Huai, Chairman, President and Chief Executive Officer of Cheyenne, said: "Cheyenne’s
Board of Directors and management are keenly focused on increasing shareholder value, and we
have carefully considered McAfee’s request to discuss a merger between our two companies.
However, we believe that the transaction proposed by McAfee is not in the best interest of
Cheyenne’s shareholders. A transaction between McAfee and Cheyenne would likely be highly
dilutive to Cheyenne shareholders, and its value would be dependent upon McAfee’s ability to
continue growth rates in its primary business--anti-virus software--at their historical pace."
"The timing of McAfee’s proposal reveals it to be a transparent ploy designed to exploit the recent
decline in Cheyenne’s stock price. We believe that the proposed exchange ratio representing
$27.50 per share does not reflect the long-term value of Cheyenne’s stock, nor our expectation
that pretax profit margins before one-time charges for the fiscal year ending June 30, 1996 will be
approximately 25%, on a 30% gain in sales over the prior fiscal year. In rejecting the McAfee
proposal, Cheyenne’s Board of Directors was advised by Broadview Associates, L.P.,
Cheyenne’s investment banker, that the implied exchange ratio resulting from McAfee’s $27.50
stock-for-stock valuation is inadequate, from a financial point of view, to Cheyenne shareholders."
"The valuation proposed by McAfee also fails to take into account the long-term strengths of
Cheyenne that have been widely recognized by industry analysts, including the growth potential of
our NetWare product line led by the ARCserve family of products, with an installed base of more
than 500,000 copies; the growth of our Windows NT product line; our excellent position in the
lucrative Japanese markets; and our expansion in the Pacific Rim, including Taiwan and China.
While we are committed to examining any and every option that will provide value to our
shareholders, we will not allow Cheyenne to be snapped up by an opportunistic would-be predator
at a discount to its true long-term value."
"In sum, McAfee’s $27.50 proposal is unattractive and unacceptable. We do not believe that a
merger with McAfee offers a compelling strategic benefit to Cheyenne’s shareholders and we are
skeptical of McAfee’s ability to maintain its current lofty valuation. The Board of Directors of
Cheyenne believes that pursuing merger discussions with McAfee is not the best strategy to achieve
long-term growth and maximize shareholder value," Mr. Huai said.
Cheyenne also announced that its Board of Directors has taken certain actions to protect
shareholder interests and shareholder value. These actions include the adoption of a Shareholder
Rights Plan and certain amendments to its by-laws which, among other things, define procedures
governing consent solicitations.
Except for any statements of historical fact, the above statements constitute forward-looking
statements. The actual results of Cheyenne may differ materially from the forward looking
statements noted above based on a number of important factors including, but not limited to:
receipt and fulfillment of expected orders; the level of returns and exchanges; changes in general
business conditions; the growth in computer networking; market volatility related to the competition
between Novell, Microsoft and other network operating system vendors and other factors; the
successful expansion of Cheyenne into the Windows NT and desktop markets; the ability to
expand successfully into new geographic regions; the maintenance and expansion of strategic
partnerships; the effectiveness of price and other competition faced by Cheyenne; the market
acceptance of new products like ARCserve Version 6 and the timing of such acceptance; changes
in distributors’ and other customers’ buying patterns; changes in the company’s and the industry’s
sales practices; one-time events; and other important factors disclosed from time to time in the
company’s Form 10K and Form 10Q and other Securities and Exchange Commission filings,
including the Form 10Q for the quarter ended Dec. 31, 1995.
About Cheyenne Software
Cheyenne Software, Inc. is an international developer of essential software solutions for NetWare,
Windows NT, UNIX, Macintosh, OS/2, Windows 3.1 and Windows 95 operating systems. Its
enterprise-wide offerings include an array of storage management, security, and communications
products, including Cheyenne HSM, JETserve, InocuLAN, FAXserve, and its flagship product
line, the ARCserve family of network backup software. Cheyenne can be contacted at (800)
243-9462 (U.S. or Canada) or (516) 465-4000, or by visiting its WWW home page at:
cheyenne.com. |
