Baan halts trading, rumours of takeover rife

Troubled ERP (enterprise resource planning) software vendor Baan Co. NV yesterday halted trading in its shares, as rumours intensified that the company is soon to be acquired.

Before Baan halted trading of its shares on the Nasdaq stock exchange at 1:48 p.m. EDT, the ramp-up in acquisition rumours helped propel its stock to $US4.19, a rise of 54 percent on the previous close of trading.

George Thompson, a spokesman for Baan, confirmed that the company has halted trading in its shares. "I have no further information about whether an announcement is expected," he said in a phone interview yesterday, adding that it's possible that some news might be forthcoming from Baan later. "I'm not sure when Baan will resume trading," he added.

Thompson said it would be "inappropriate" to comment on any of the acquisition rumours. The company currently being most favoured as Baan's rescuer from its financial woes is UK engineering company Invensys PLC which may well announce an all-cash offer for the ERP vendor as early as tomorrow, according to reports.

Invensys is due to report today preliminary financial results for the 12 months ended March 31, 2000, according to information on the company's Web site. Invensys Chief Executive Officer Allen Yurko is due to host a presentation in London to review the year.

Other possible suitors for Baan's hand include US players with their own rival ERP offerings -- Oracle and Computer Associates International (CA) -- even dominant ERP vendor SAP AG has been mentioned.

Of particular interest to potential buyers is Baan's CRM (customer relationship management) business, the result of its acquisition of Aurum Software in May 1997. In a move widely seen as paving the way for a sell-off of its CRM business, Baan announced plans to form a new subsidiary focused on the Net CRM market.

Baan has been in play for many months, but of late the acquisition rumours have significantly heated up, and with yesterday's halt in trading, the likelihood that the company will be bought is becoming more of a reality.

Last month, Baan reported its seventh consecutive loss-making quarter when it released financial results for the first quarter of fiscal 2000.

Fears of the impact of the year 2000 computer problem meant that most of the major ERP players had a tough 1999, but Baan appeared unable to recover momentum once 2000 begun after a poor financial performance during fiscal 1999.

In January, Baan's Chairman and Chief Executive Mary Coleman unexpectedly quit. At the same time, the company announced the closing of 14 branch offices and a cut in its workforce of around 4 percent. Coleman had come to Baan when the company acquired Aurum for $250 million in May 1997.

Later in January, Baan's Chief Financial Officer James Mooney also quit. The following month, the ERP vendor announced the hiring of an investment firm -- Lazard Freres & Co. -- to help sell off part or all of the company. The news came hard on the heels of Baan reporting a $236 million net loss for the fourth quarter of 1999.

The ERP vendor then in March announced the selling off of its Coda financials software unit for $49.3 million cash to UK company Science Systems PLC. Baan completed its purchase of UK-based Coda Group PLC for about $83 million in May 1998.

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