Invensys to Buy Baan for US$709M in Cash

LONDON (05/31/2000) - Confirming yesterday's rumors, U.K. automation and controls group Invensys PLC has offered to buy Baan Co. NV for approximately 762 million euros (US$708.7 million), the companies announced today.

Invensys will pay 2.85 euros per share for the Netherlands-based ERP (enterprise resource planning) software vendor, in a cash deal that is expected to begin within three weeks, Baan and Invensys said in a statement.

Baan's trade unions, Works Councils and SER Merger Committee, have all been informed of the offer and Baan's Supervisory and Management Boards have already endorsed the proposed sale, Baan and Invensys said.

Furthermore, the Baan boards committed to sell their shares, worth 0.3 percent of Baan, should the deal go through. Additionally, Baan shareholders, Vanenburg Group (the Baan investment group), Fletcher International Ltd. and General Atlantic Partners also announced their intentions to sell their stakes to Invensys, for a combined total of 10.8 percent of the company.

As part of its conditional offer, Invensys said it will have to purchase 95 percent of all Baan shares.

Should the sale of Baan become finalized, Invensys will fold the company into its newly created Invensys Software and Systems division (ISS), the companies said. The ISS division, which will produce the company's Leanware line of software, will be expected to have an annual turnover of approximately $2 billion.

Invensys estimates it will have to spend $400 million on restructuring Baan over an 18-month period, reducing the Dutch company's costs by between $60 million to $120 million per quarter until the fourth quarter of 2000. Invensys' board has estimated that its ISS division can break even within 12 months, the companies said.

Though Invensys said it would retain "key employees," the number of jobs that would be lost in a restructuring effort was not estimated.

Invensys currently employs over 90,000 people in 40 countries and today reported a net profit of 1.2 billion pounds for the fiscal year ending March 31.

Yesterday, Baan halted trading of its shares on the Nasdaq stock exchange at 1:48 p.m. EDT, after acquisition rumors helped propel its stock to US$4.19, a rise of 54 percent on the previous close of trading. [See "Baan Halts Trading, Rumors of Takeover Rife," May 30.]In late morning trading today on the Amsterdam stock exchange, Baan gained 15.27 percent to trade at 3.02 euros per share, according to the Web site EuropeanInvestor.com.

In late morning trading, Invensys stock trading over the London stock exchange fell 4.24 percent to 254.25 pence per share.

Baan, with dual headquarters in Barneveld, the Netherlands, and Reston, Virginia, can be reached at +31-342-42-8888 or at +1-703-234-6000, or on the Internet at http://www.baan.com/. Invensys, based in London, can be reached at +44-207-834-3848 or on the Internet at http://www.invensys.com/.

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