Proposed buyout review (update):
TIBCO Software Inc. (TIBX)
Record date for voting rights:
October 27, 2014
December 3, 2014
Vista Equity Partners
first over-$1 billion buyout that appears to justify support of
appraisal rights since the start of 2014, TIBCO Software Inc.
announced on September 29, 2014 (here)
that it had entered into an agreement to be acquired by Vista Equity
Partners for $24 per share. Following is a preliminary review of the
three screening criteria for our consideration of appraisal rights
proposed transaction should be considered a “standalone” buyout.
Although Vista is reputed for active and effective management support
of its portfolio companies, opportunities to improve management
quality can be implemented by a business enterprise with or without a
change in its ownership and should therefore not be considered a value
created by a combination. It is therefore unlikely that the bid price
of Vista, which was in any event nearly matched by a $23.75 per share
bid from a rival financial sponsor,
would be considered to include value that should be adjusted for
synergies of a business combination. Under the circumstances, it can
be assumed that the professional investment manager with access to
inside information will not be able to make convincing arguments that
it knowingly offered to pay more than the intrinsic value of TIBCO.
size of the buyout is in a range that should justify support for
“Level 1” pricing if owners of 5% of the company’s stock want AVR
(Appraised Value Rights) liquidity, and should in any event allow for
“Level 2” pricing even for AVR participants that decline public
company is incorporated in Delaware, the state that provides a
well-defined and relatively predictable process for appraisal rights.
should be noted that there may be delays or modifications of the
proposed transaction resulting from class action claims based on
alleged miscalculations of the purchase price,
We will of course be monitoring this.
November 17, 2014
Chairman, The Shareholder Forum
Madison Avenue, New York, New York 10022
 See “Specific
December 23, 2013 Forum
Report: Getting Organized.
See page 36 (PDF p.46) of the
October 29, 2014, TIBCO
Software Inc., SEC Forum DEFM14A: Proxy Statement for special meeting
of stockholders on December 3, 2014.
November 5, 2014
Bloomberg: "Tibco Directors Faulted Over $100 Million Vista Deal