SiliconBeat

Vermillion, the biotech company formerly known as Ciphergen Biosystems, filed for bankruptcy protection Monday after losing four of the directors on its board the week before, when it also received the the asked-for resignations of its CEO, interim chief financial officer, and vice president in charge of business development.

None of the director resignations were “the result of any disagreement” with the company, and the senior executives quit “for the sole reason of conserving Company resources”, according to the filing announcing the news.

We first wrote about Vermillion in September 2007 when we noted that Phronesis Partners, an Ohio-based hedge fund that takes its name from a Greek term used by the philosopher Aristotle to denote “practical wisdom,” or “prudence,” disclosed that it was Vermillion’s largest shareholder then the largest owner of of a company that has yet to show a profit and has accumulated losses to the tune of $218 million since its founding in 1993.

Transmeta, the Santa Clara developer of semiconductor technology, said Wednesday afternoon that it “will now explore a possible sale” of the company. The move no doubt pleased its newest board member and largest shareholder, Bryant Riley, who gave up his proxy battle with the company in return for a board seat for himself and two others he agreed on with the company. Riley, who owns 12.1 percent of Transmeta’s shares, also agreed to limit any future accumulation of them to no more than 13 percent. Read the rest of this entry »

Earlier this week, we noted that Oracle’s acquisition binge has reshaped the company’s workforce, with almost one-third of employees having joined through those purchases.

It turns out that the executive ranks are also being altered. A proxy filed Wednesday as part of Oracle’s (ticker:ORCL) pending acquisition of Bea Systems (ticker:BEAS) includes a PowerPoint presentation by President Charles Phillips extolling the virtue of the combination.

Among the upsides for BEA employees about to be eaten alive join Oracle is the opportunity, some day, to be running the joint. Just check out this slide that lists current execs who joined the company through acquisitions:

Can we assume that one day that slide will include someone with the CEO title?

BEA Systems finally got around to filing its proxy statement covering the fiscal year that
ended more than a year ago on Jan. 31, 2007. It turned out to be a very good year for
co-founder and chief executive Alfred Chuang, even though BEA shares ended that year still down 30 percent from where they were five years before.

In addition to his $862,500 salary Chuang was given two bonuses: one for his work in fiscal 2007 totaled $929,543, and a second “”discretionary bonus” for his efforts in fiscal 2006 of $200,000. (Note: that would be in addition to the $750,000 bonus the board had already given Chuang for his fiscal 2006 efforts.) Oh, and Chuang also made another $6 million exercising options in fiscal 2007.

Chuang also got various other goodies, including the use of a company car and driver worth $188,853, matching 401(k) contributions of $3,000 (Geez, what’s the match?), personal financial planning and tax preparation services worth $15,545 plus $6,955 to pay for the taxes on it, “miscellaneous other compensation of $5,910,” plus $6,800 for  “donations.” (Um, couldn’t he afford to make his OWN donations?)

Total on the above: $8.2 million. But wait, there’s more.

Chuang was also given a stock award for 233,000 shares that were worth $3 million when granted, but whose value has risen to $4.5 million given Oracle’s pending purchase of BEA Systems for $19.38 per share. And an option grant covering 700,000 shares with a strike price of $12.93 will net Chuang another $4.5 million when the deal with Oracle is done.

As of a year ago, Chuang also controlled options covering 5.67 million shares that will bring him $63.6 million when the sale goes through. That should help salve any wounds he feels once Larry Ellison becomes his boss. It will also help take the sting out of the $2.45 million Chuang agreed to repay BEA last year to cover the amount of improper gain he received exercising and selling shares from three mis-priced option grants in 1998 and 1999.

BEA Systems will be filing another proxy before much longer in preparation for a shareholder vote to approve the Oracle buy-out. We look forward to seeing what kind of compensation arrangements were made for Chuang during BEA’s final fiscal year just ended.  Could his parachute get any more golden?

Adaptec and its recent nemesis and largest shareholder, Steel Partners, declared a cease fire Friday afternoon when the Milpitas maker of computer storage products said it would nominate three of Steel’s representatives to its board of directors, while the New York private investment firm agreed to withdraw its opposing slate of five nominees.

Read the rest of this entry »

According to the Wall Street Journal:

“In its response, BEA said the company “is worth substantially more to Oracle, to others and, importantly, to our shareholders” than Oracle’s $17-a-share offer. It asked for more information from Oracle, and said it would review the bid.”

And what say Carl Icahn? In an interview with Reuters:

Icahn said the offer from Oracle Chief Executive Larry Ellison may spare BEA from threats he has made to wage a proxy battle if the BEA board does not put the software maker up for sale.

“I think this will save a lot of … aggravation,” he said. “I think the best way to win the war is not to fight it.”

Speaking of winning, the two folks at BEA who are most likely to benefit from the deal are also people who might have the hardest time selling. Here are their most recent stock holdings, according to Thomson Financial, and what they’d be worth at $17 per share:

• CEO and founder Alfred Chuang: 2,743,680 shares, $46,642,560
• Director Dean Morton: 570,478 shares, $96,98,126

Last week, we cited a study from Renaissance Capital that showed that IPOs still did well in the third quarter despite the nervous market this summer. And the IPO market is poised to have a big fourth quarter.

Not so for mergers and acquisitions.  

According to a report released today by Brenon Daly, a financial analyst at The 451 Group, “overall spending on tech and M&A in the July-September period was cut in half from a year ago, plummeting from $99 billion to $52 billion.” It’s even worse when consider there was $255 billion spent on tech and telecom deals in the previous three months.

Ouch.

The culprits? Those buyout firms. They spent more than half the money on all the tech and telecom deals in the first six months. But this summer, their spending dropped to $7 billion compared to $44 billion for the same quarter one year ago.

This didn’t exactly inspire companies to go bargain hunting. Companies only spent $45 billion in the third quarter on tech and telecom acquisitions, compared to $55 billion last year.

And Daly’s take on all this from his report:

“Who would have thought that the all-powerful tech buyout barons could be knocked out of the market by a bunch of over-extended homeowners? And yet, that’s what happened in the third quarter, as LBO shops found that once-plentiful cheap debt – their currency of choice – had all but dried up because of this summer’s sub-prime mortgage meltdown.”

CyberSource (ticker: CYBS), the Mountain View electronic payment systems company, learned a tricky lesson this year in the realm of mergers and acquisitions. Everyone knows there’s a ritual of give and take where each side tries to figure just how much it can squeeze and still get a deal. Well, CyberSource got squeezed.

Back in June, CyberSource announced it was paying $565 million in cash and stock for Authorize.net, another electronic payment company based in Marlborough, MA. In a proxy filed on Thursday, CyberSource disclosed the background of its merger talks.

In fact, CyberSource tried to buy Authorize.net back in 2004, but was outbid by Lightbridge. In April 2007, Lightbridge changed its name to Authorize.net. Back in June 2006, Authorize.net (then called Lightbridge) contacted CyberSource about a possible merger. In October 2006: CyberSource made its first tentative bid: about $12.50 per share.

No thanks, said Authorize.net, but let’s keep talking. And so they did. And in the meantime, up went Authorize.net’s stock price.

Discussions dragged on through the spring. And long story short, CyberSource eventually ended up agreeing to a deal worth $19.33 per share, using a mix of stock and $125 million in cash.

Winner: Authorize.net.

And why would this be such a cause to celebrate? Hewlett Packard (ticker: HPQ) announced Monday that enough shareholders had tendered shares for the Palo Alto company to close its $1.6 billion cash deal to acquire Sunnyvale-based Opsware (ticker:OPSW…but not for long).

Thus ends years of hard work, changes of strategies, and difficult merger negotiations for the pour souls at Opsware. And thus begins the handing out of the big wads of a cash. In a series of Form 4s filed on Wednesday, Opsware disclosed just how much each insider will be getting from the deal that’s paying $14.25 per share in cash:

• Marc Andreessen, founder, director, Internet poster boy, $98,279,186.25
• Benjamin Horowitz, president and CEO, $59,588,256
• Michael Ovitz, director, $15,152,196
• Sharmila Shahani, executive vice president, $1,570,578
• Michael Volpi, director, $1,205,991.75
• David Conte, chief financial officer, $1,187,880
• William Campbell, director, $1,068,750
• Mark Cranney, executive vice president, $298,409.25
• Simon Lorne, director, $99,750
• Jordan Breslow, general counsel and secretary, $27,801.75

What do California Micro Devices and Ikanos Communications have in common? Both are semiconductor firms located in Silicon Valley, both have stock prices that hit 52-week lows in the last month and both have a new major shareholder called Dialectic Capital Management, a New York hedge fund.

In a form filed Wednesday, Dialectic reported for the first time owning 1.27 million shares of California Micro Devices (ticker CAMD), or 5.5 percent of shares outstanding. No word at this time on what it paid for the shares, but California Micro hit a 52-week low of $3.56 on Aug 22. Its shares climbed 22 cents Wednesday, or 5.7 percent, to $4.10 Wednesday.

It filed another form reporting it had acquired 1.66 million shares of Ikanos Communications (ticker:IKAN), or 5.8 percent of the company. Shares of Ikanos climbed 11 cents, or two percent Wednesday, bouncing back after hitting a 52-week low of $5.55 early in the trading day.

The hedge fund is managed by John and Luke Fichthorn, who also run Dialectic Antithesis Partners.