Question #4: Any truth to the rumor that Centura Software will be taken over soon? What is the real likelyhood that it will happen in your opinion?
How would I know if there is any truth in the rumor? Generally speaking there is usually very little if any truth in rumors, but that is why they are known as rumors in the first place! And if I was actually in a position to know whether it is even partially true,
then it would probably be illegal for me to disclose it anyway!
Having said that, I *do* sincerely and strongly believe that Centura will be taken over very soon because ===>
A) The company's technology has an excellent reputation. The company's
award-winning SQLWindows database is widely used throughtout the world on a variety of different platforms from Windows NT to Solaris, to OS/2, and now Windows95,etc; and its 12% share of the database market is expected to increase as a result of recent enhancements and new Web-enabling features of the Centura line.
B) The company can be bought for practically nothing as a result of its *past* performance. Takeover price could go as high as $20 per share according to some based on the value of the technology, Centura's current price/sales ratio, and the wide price-to-offer range for software companies. Personally I think that $12 is more realistic, but this is all speculation of course.
C) The company's technology is probably more valuable as a synergy-adding component of a larger and well-established software company than by attempting to continue to compete with giants like IBM, Microsoft, Oracle, Informix, etc., in a rapidly growing but already crowded market that, according to an article in the November 1996 issue of Bank Technology News, will grow from $15 million in 1995, to over $280 million by the year 2000.
D) Recently ministers from 128 nations signed a series of agreements virtually scraping tariffs on information technology. As a result, economists say, the pacts will accelerate even further the explosive growth of the information technology industry around the world and especially in Asia. Todate Asia has been one of Centura's most promising and rapidly growing markets; and the trend can only accelerate with the regions growing presence on the Internet. This may also be tempting to some of Centura's competitors whose products are selling in the USA, but have not been faring as well around the world and especially in Asia.
E) With Umang Gupta's recent resignation from the Board of Directors the course is now clear for another takeover attempt by Oracle for example, or others whom Mr. Gupta might have been reluctant to talk to earlier.
F) According to Broadview Associates (CommunicationsWeek, December 23,
1996), "merger mania" will accelerate in 1997 when up to 76% of Software Products & Services companies are *likely* to pursue a merger or acquisition. For other fields the projected percentages are as follows: Hardware (63%), Media (89%), Telecom (70%), Support Products and Services (59%).
Does this mean that it will actually happen? Of course not, but in my humble opinion the *likelyhood* of a CNTR takeover/merger does sweeten the company's ridiculously low trading prices, even though nobody should invest on CNTR based *solely* on this or any other rumors. |
