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Plumtree Software Inc. has rejected an unsolicited takeover bid made earlier this week by the Sutter Opportunity Fund 2 LLC.
The bid, valued at nearly $150 million, would have paid $5 a share for each outstanding share of the San Francisco-based corporate portal software developer. While that would have been a premium over the stocks current price, around $3 a share, it would have still been well under Plumtrees June 4 IPO price of $8.50 per share.
Few observers had expected Plumtree to accept the deal, given how much under the IPO price the offering was and Sutters checkered history in attempting to acquire companies. The company has been rebuffed in its takeover bids at least five times, most recently by real estate investment trust FFP Partners LP last month.
“Plumtrees Board of Directors and senior management have analyzed the nature and terms of the offer and after due consideration have determined that at this time discussions with Sutter Capital Management would not be beneficial to Plumtree or its shareholders,” said Plumtree CEO John Kunze in a statement.
The fact that Sutter put out a press release on the offer just a day after making it, without consulting Plumtree, also seemed to rub Plumtree executives the wrong way.
Sutter officials remained defiant, though, saying that Plumtree executives werent doing enough to keep the companys stock value up.
“We are disappointed that Plumtree has chosen not to even discuss the offer with us, and we hope that Plumtrees officers and directors will take a more proactive approach to maximizing shareholder value in the future,” said Robert Dixon, president of Sutter Capital Management LLC, the corporate parent of the Sutter Opportunity Fund 2.
Dixon suggested that Plumtree execs authorize a stock buyback to increase the value of the companys shares.
Sutter director William Knuff added in a statement that Plumtree chose a bad time to go public.
“So far, managements decision to go public has only benefited Plumtrees private investors, and has done so entirely at the expense of public shareholders and employees holding out-of-the-money options,” said Knuff. “The company now trades near its cash value per share, yet shows strong growth potential, positive earnings and appears undervalued to us by almost any metric. We hope Plumtrees management will demonstrate to the market that it holds the same view.”