Logility Inc. has turned to a special committee of independent directors to decide how to respond to a planned, yet unsolicited, cash tender offer by American Software Inc. to acquire the supply chain specialist.
American Software, which already holds nearly 88% of Logility shares, announced it would offer $5.10 per share, a 2% premium over the $5 closing price on March 18, 2009, the date American Software made its intentions known in what appears to have been a surprise move to Logility. At midday today, Logility’s stock was trading at $5.00.
American Software, which provides integrated business applications, such as supply chain management, ERP, Internet commerce, and warehouse management, said the offer would begin on or about April 10 and expire on or about April 30, unless it is extended. Logility’s special committee has hired legal and financial advisers to help in evaluating the proposed offer. The committee will issue its recommendation to shareholders within 10 days of an offer’s commencement. In a statement, Logility made a point of noting that the proposal for the tender offer “was not made pursuant to any agreement with Logility.”
In its most recent quarterly report, Logility reported a 7% increase in revenue to $10.6 million, attributable primarily to a 57% jump in license sales. For the third quarter, the company reported GAAP net earnings of $1.76 million, more than double the $835,000 reported a year earlier. Cash and investments totaled approximately $47.3 million as of Jan. 31, 2009.