Invensys Takes Control Of Baan - InformationWeek

InformationWeek is part of the Informa Tech Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them.Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.


Invensys Takes Control Of Baan

Faced with the reality of Baan Co. losing up to $1 million a day, British electronics and software company Invensys plc has taken control of Baan without acquiring the number of shares it originally wanted to own. Invensys said today that it's also immediately assuming responsibility for Baan's assets and liabilities, despite having acquired only 75% of outstanding shares, not the 95% the company had sought.

An Invensys spokesman says Baan was losing $1 million a day as Invensys waited for a group of 22 shareholders to tender their holdings--about 20% of shares. Rather than allowing Baan to reach a point where recovery was impossible, Invensys decided to act immediately, he says. Invensys will immediately begin financing Baan's operation, including customer support, sales and marketing, and software development, he says. The deal will formally close Aug. 15 at an emergency meeting of Baan shareholders at which Invensys, as the majority stockholder, will vote to give itself final control--including the power to liquidate any unneeded buildings or other assets. At that time, trading of Baan stock will likely be suspended by the Dutch stock exchange and the remaining 25% of shares will be purchased some time after that at Invensys' original offer of $2.65 per share.

Baan said last week that it expected to post losses of $85 million to $95 million for the second quarter of 2000, which ended June 30. The company reported net losses of $309.6 million for 1999. Many Baan shareholders are upset by the Invensys offer because their shares, which traded at more than $55 in April 1998, plunged to a low of $1.12 in May and recently traded in the range of $2 to $2.80. Invensys, which would pay more than $709 million for all Baan shares, had set a July 13 deadline for 95% of Baan shares to be tendered and extended the deadline before taking action today.

Baan interim CEO Pierre Everaert has estimated it would take more than $1.3 billion in cash to return Baan to profitability as a separate company. Once the deal is closed, Baan will become part of a new software division for Invensys, which manufactures electronics for manufacturing operations, as well as a line of enterprise resource planning software. The spokesman says Invensys has decided to continue using the Baan brand to market existing products and for new software offerings.

We welcome your comments on this topic on our social media channels, or [contact us directly] with questions about the site.
Comment  | 
Print  | 
More Insights
The State of Cloud Computing - Fall 2020
The State of Cloud Computing - Fall 2020
Download this report to compare how cloud usage and spending patterns have changed in 2020, and how respondents think they'll evolve over the next two years.
How GIS Data Can Help Fix Vaccine Distribution
Jessica Davis, Senior Editor, Enterprise Apps,  2/17/2021
Graph-Based AI Enters the Enterprise Mainstream
James Kobielus, Tech Analyst, Consultant and Author,  2/16/2021
11 Ways DevOps Is Evolving
Lisa Morgan, Freelance Writer,  2/18/2021
Register for InformationWeek Newsletters
Current Issue
2021 Top Enterprise IT Trends
We've identified the key trends that are poised to impact the IT landscape in 2021. Find out why they're important and how they will affect you.
White Papers
Twitter Feed
Sponsored Live Streaming Video
Everything You've Been Told About Mobility Is Wrong
Attend this video symposium with Sean Wisdom, Global Director of Mobility Solutions, and learn about how you can harness powerful new products to mobilize your business potential.
Sponsored Video
Flash Poll