The Register - Management: Financial News
In search of life raft AMD, Intel's on-again, off-again rival, has given another example how it's mostly been off again over the past year, disclosing plans to take a "material" goodwill impairment charge for its $5.6bn acquisition of ATI Technologies.…
Shanghai Daily: Business - shanghaidaily.com
SAP AG, the world's biggest maker of business-management software, fell the most in eight months in German stock market trading yesterday after predicting that its 4.8 billion-euro (US$6.8 billion) acquisition of Business Objects SA would depress earnings. SAP fell as much as 6.4 percent to 38.98 euros in Frankfurt, and traded at 39.21 euros as of 10:47am, valuing the company at 49.8 billion euros. The purchase of Business Objects, for 42 euros in cash a share, will reduce earnings per share next year before adding to profit in 2009, SAP said late on Sunday. The deal is the biggest purchase in SAP's 35-year history. The acquisition marks a departure from Walldorf, Germany-based SAP's strategy of expanding mainly without acquisitions. Oracle Corp, SAP's largest rival in software used to manage processes such as billing and payroll, has spent more than US$25 billion on purchases since 2005, making it the most acquisitive company in the software industry. "It's the U-turn strategy," Ioannis Papassavvas, a fund manager at Allianz Global Investors in Frankfurt, told Bloomberg News. "They made the acquisition to cover the possible incompetence to increase earnings next year. They're also overpaying." SAP's offer is 20 percent more than Business Objects's closing price in Paris on Friday. Business Objects is the world's largest maker of software that tracks corporate databases and counts Walt Disney Co and Unilever NV among its 44,000 clients. Business Objects, based in the Paris suburb of Levallois-Perret, supports the "friendly takeover," and its management board plans to recommend the offer to shareholders, subject to regulatory requirements. SAP will finance the purchase using available cash and borrowings. The deal will cut earnings per share under US accounting standards by "mid single digit" euro cents, and increase per-share earnings starting in 2009, SAP said. SAP expects the transaction to be completed in the first quarter of 2008. John Schwarz will remain chief executive officer of Business Objects, which will become a stand-alone unit. "It's the unique combination of two market leaders," SAP CEO Henning Kagermann said on a conference call on Sunday. "We like the open-ended, independent business-intelligence platform of Business Objects." Kagermann said as recently as last month that he wasn't under "any pressure" to make a large acquisition.