Software AG Investor Unlikely to Accept Offers, Chief Says
By Ragnhild Kjetland
June 9 (Bloomberg) -- Software AG, Germany’s second-largest software maker, has had takeover offers, although its biggest shareholder is unlikely to bite unless the price and timing are right, the company’s chief executive officer said.
Software AG, which counts the 7-Eleven chain of stores in the U.S., Ferrovial in Spain and the City of Munich among customers, is 29 percent owned by the Software AG Stiftung, or foundation.
“There are always companies that are interested in our portfolio,” CEO Karl-Heinz Streibich said in an interview yesterday. “If the price is excellent, if it fits with the strategy and the timing is good, then the foundation might be open to it.” The possibility of a sale is remote, he said.
The CEO said Software AG would “definitely” be a good fit for SAP AG, the world’s biggest business-management software company, commenting on persistent speculation of the two firms combining. SAP, which last month agreed to buy Sybase Inc. for $5.8 billion, told shareholders at the company’s annual general meeting yesterday that it is targeting more acquisitions as it seeks to win market share.
“We continue to search for acquisitions to provide us with innovative functionality and software,” SAP Co-CEO Jim Hagemann Snabe said at the meeting in Mannheim, Germany. “We are also open to larger acquisitions.”
The German company is fending off competition from Oracle Corp., which has spent more than $42 billion on 64 companies since January 2005. SAP bought Business Objects in 2007 for 4.8 billion euros ($5.7 billion).
Economic Woes
Software AG, based in Darmstadt, Germany, has a market value of about 2.4 billion euros. Software AG’s Streibich declined to say whether he would favor a combination with SAP.
“That’s a question for the shareholders,” he said.
Software AG’s shares fell 0.9 percent to 83.10 euros yesterday. The stock has gained 8.8 percent this year.
Separately, Streibich said it is “conceivable” that the crisis sparked by concern over European government debt could result in second general financial crisis.
“I don’t think governments are in a position to really reduce their debts,” he said. “Because politicians always do what they can to win votes, and they do what they can to improve the lives of voters, they will always increase their debts,” Streibich said. “It is a systemic crisis of politics and isn’t limited to just one country or one economy.”
The CEO said the decline of the euro against the U.S. dollar is having “seriously” positive effects on Software AG’s sales. He declined to give details, adding that the group’s published targets for 2010 remain valid.
The company said in April its sales this year will increase between 25 percent and 30 percent from 847.4 million euros, and net income will increase between 8 percent and 12 percent from 141 million euros.
--Editors: Jim Silver, Vidya Root.
To contact the reporter on this story: Ragnhild Kjetland in Frankfurt rkjetland@bloomberg.net.
To contact the editor responsible for this story: Vidya Root at vroot@bloomberg.net
June 9 (Bloomberg) -- Software AG, Germany’s second-largest software maker, has had takeover offers, although its biggest shareholder is unlikely to bite unless the price and timing are right, the company’s chief executive officer said.
Software AG, which counts the 7-Eleven chain of stores in the U.S., Ferrovial in Spain and the City of Munich among customers, is 29 percent owned by the Software AG Stiftung, or foundation.
“There are always companies that are interested in our portfolio,” CEO Karl-Heinz Streibich said in an interview yesterday. “If the price is excellent, if it fits with the strategy and the timing is good, then the foundation might be open to it.” The possibility of a sale is remote, he said.
The CEO said Software AG would “definitely” be a good fit for SAP AG, the world’s biggest business-management software company, commenting on persistent speculation of the two firms combining. SAP, which last month agreed to buy Sybase Inc. for $5.8 billion, told shareholders at the company’s annual general meeting yesterday that it is targeting more acquisitions as it seeks to win market share.
“We continue to search for acquisitions to provide us with innovative functionality and software,” SAP Co-CEO Jim Hagemann Snabe said at the meeting in Mannheim, Germany. “We are also open to larger acquisitions.”
The German company is fending off competition from Oracle Corp., which has spent more than $42 billion on 64 companies since January 2005. SAP bought Business Objects in 2007 for 4.8 billion euros ($5.7 billion).
Economic Woes
Software AG, based in Darmstadt, Germany, has a market value of about 2.4 billion euros. Software AG’s Streibich declined to say whether he would favor a combination with SAP.
“That’s a question for the shareholders,” he said.
Software AG’s shares fell 0.9 percent to 83.10 euros yesterday. The stock has gained 8.8 percent this year.
Separately, Streibich said it is “conceivable” that the crisis sparked by concern over European government debt could result in second general financial crisis.
“I don’t think governments are in a position to really reduce their debts,” he said. “Because politicians always do what they can to win votes, and they do what they can to improve the lives of voters, they will always increase their debts,” Streibich said. “It is a systemic crisis of politics and isn’t limited to just one country or one economy.”
The CEO said the decline of the euro against the U.S. dollar is having “seriously” positive effects on Software AG’s sales. He declined to give details, adding that the group’s published targets for 2010 remain valid.
The company said in April its sales this year will increase between 25 percent and 30 percent from 847.4 million euros, and net income will increase between 8 percent and 12 percent from 141 million euros.
--Editors: Jim Silver, Vidya Root.
To contact the reporter on this story: Ragnhild Kjetland in Frankfurt rkjetland@bloomberg.net.
To contact the editor responsible for this story: Vidya Root at vroot@bloomberg.net