Individual Investor Online article...tends to back up your scenario...
Look for a takeover offer for Manugistics Group (NASDAQ: MANU) <http://www.iionline.com/guest/copage/com_frm.asp?ticker=MANU> any day now. The expected price tag: $18 a share, at the minimum. Now, this shouldn't come as a surprise to Manugistics shareholders. The company said on Dec. 22 that it is 'in preliminary discussions with other companies concerning a potential business combination.' Since then, though, the stock continued to trade around $12 a share. This is down from a 52-week high of $66.38. Obviously, investors have been skeptical that they will receive a premium. The reason: The company is in lousy financial shape. In December the company said that revenue for the three months ending Nov. 30 was up just 2% to $43 million. It also reported a $0.39 loss per diluted share, including a $701,000 restructuring charge. For the nine-month period, the company reported a loss of $22.4 million, or $0.85 per share. However, Christopher Desautelle, who follows the company for Legg Mason, says the problem is not its products. 'They have a cash crunch and a horrible salesforce,' he insists. 'But they have good technology and customer base.' Manugistics offers software aimed at the so-called 'front-office' market for corporations. For example, it enables manufacturing companies to manage their inventory of parts used in their products, enabling them to better plan production runs and delivery dates. 'It offers (customers) huge efficiency gains. Who are the likely buyers? Some biggies, folks. SAP (NYSE: SAP) <http://www.iionline.com/guest/copage/com_frm.asp?ticker=SAP>, Oracle (NASDAQ: ORCL) <http://www.iionline.com/guest/copage/com_frm.asp?ticker=ORCL> or J.D. Edwards (NASDAQ: JDEC) <http://www.iionline.com/guest/copage/com_frm.asp?ticker=JDEC>. A longshot: IBM (NYSE: IBM) <http://www.iionline.com/guest/copage/com_frm.asp?ticker=IBM>. These companies specialize in so-called 'back-office' software. 'This gets them in the front office,' says Desautelle. When will a deal be announced? Very soon, insists one hedge fund manager. 'Something is starting to leak out,' Desautelle concurs. 'Probably a deal is done and it needs board approval.' A call to the company was not returned. Desautelle thinks Thursday morning market activity could indicate that J.D. Edwards is the buyer. Its stock is currently down $2.38, or 10.2%, to $21. Manugistics is trading at $15, up $2.38, or 19%. Desautelle figures $18 is a minimum takeover price. But this is because Manugistics desperately needs a deal. He adds: 'Its technology in a perfect world is worth $23.' Stay tuned.
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