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gnulaw (54.24)

[Update1] Pervasive Software PVSW In Hostile Takeover. White Knight LOEB to the Non-Insider Shareholders Rescue

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October 13, 2012 – Comments (12) | RELATED TICKERS: PVSW.DL , SPLK , ATTU

[Update1] [Comments 1-27 inclusive] Pervasive Software PVSW In Hostile Takeover - Six Law Firms Already Investigating Board For Breach Of Fiduciary Duty.

 

On October 10th LOEB[1] CAPITAL MANAGEMENT filed SEC FORM 13-D which means LOEB owns greater than or equal to five (5%) percent of the outstanding shares of PVSW common stock 853,593 shares (5.16%).  Incorporated within said filing was the below letter from LOEB to the Pervasive Board of Directors. Folks, this pretty much vindicates all allegations made on this blog against the PVSW Board of Directors. Class Action litigation is now imminent against the Board from non-insider shareholder(s), and again, damages will include but not be limited to all Directors options awarded cumulative retroactive to 1994 and will seek imprisonment for allegations previously cited.

 

August 28, 2012

Board of Directors
Pervasive Software Inc.
12365-B Riata Trace Parkway
Austin, Texas 78727

To the Board of Directors:

Loeb Arbitrage Management LP and Loeb Offshore Management LP, together doing business as Loeb Capital Management, and affiliated entities (collectively, “Loeb”) over which it has management discretion are owners of 544,264 shares of the common stock of Pervasive Software Inc. (“PVSW” or the “Company”) as of close of business on August 27, 2012. We are writing this letter to express our concern regarding both the vague language contained in yesterday’s press release from PVSW’s board of directors and the information which was excluded from the announcement. The Company’s disclosure that it has retained Shea & Company, LLC (“Shea”) “to assist and advise” in its evaluation of the proposal received from Actian Corporation (“Actian”) on August 13, 2012, “as well as the Company’s other strategic alternatives, including remaining independent and executing its existing strategic plans” is glaring in its omissions.

To be clear, we view the failure to announce the commencement of a formal process to maximize value for shareholders through a competitive auction process that focuses solely on selling the Company to the highest bidder as a failure to satisfy the fiduciary duty the PVSW board of directors owes to the shareholders of the Company. We acknowledge the retention of Shea; however, given that Shea is not a nationally recognized investment banking firm, shareholders are left to wonder whether the Company is indeed endeavoring to maximize value by selling the Company to the highest bidder. For that matter, the simple fact that the Company avoided mentioning maximizing shareholder value adds fuel to the fire of our concern, as we believe this to be atypical for such an announcement.

In yesterday’s press release, the Company refers to “remaining independent and executing its existing strategic plans” as one of its “other strategic alternatives.” This language is distressing to us as it is consistent with language often used by boards that are entrenched and actively engaged in behavior that is not conducive to maximizing value for shareholders. More troubling to us than the affirmative statements is the absence of a statement of commitment to maximizing value for shareholders. As we have previously discussed, the Actian proposal represents a stock price level that has not been exceeded (or even approached) in over 8 years. Quite simply, the growth of PVSW’s revenues and profits has been anemic and appears unlikely to change in a positive manner. It is our view that the only acceptable alternative involves the Company focusing solely on using the proposal from Actian as a catalyst to maximize value for PVSW shareholders and we are disappointed by the Company’s failure to explicitly state just such a commitment.

Given our concerns, we request a meeting with PVSW’s management team and board of directors as soon as possible but in no event later than September 6, 2012. It is imperative that this meeting occur well in advance of September 15, 2012.
[emphasis added]

Thank you for reading this letter.
 
     
Sincerely,


Gideon King
President, Chief Investment Officer
LOEB CAPITAL MANAGEMENT
61 Broadway, 24 th Floor
New York, New York 10006

_______________________________________

 

Timeline

June 15 PVSW short position 23,758 shares

June 29 PVSW short position 559,704 shares

July 24 Pervasive announces Q4/FY 2012 Revenues/Earnings.

August 13 Actian Corp makes a public proposal to acquire Pervasive for $8.50/share Six law firms jump in between August 13 and August 16 to investigate the PVSW Board for Breach of Fiduciary Duty, in addition to whether the Pervasive Board of Directors is acting in shareholders’ best interests and whether the proposed consideration would be fair and adequate.

August 27 Pervasive announces retaining Shea & Company LLC "...to assist and advise the Board of Directors in its evaluation of an unsolicited, non-binding proposal the Company received from Actian Corporation on August 13, 2012, as well as the Company’s other strategic alternatives, including remaining independent and executing its existing strategic plans..."

August 28 LOEB Capital (13D shareholder) sends above letter to PVSW Board of Directors.

September 12 Pervasive announced "...that its Board of Directors has met to consider the advice of its independent financial advisor, Shea & Company, LLC, with respect to the evaluation of an unsolicited, non-binding proposal the company received from Actian Corporation on August 13, 2012.  The Board of Directors has instructed Shea & Company to solicit potential bids from interested parties and engage with those parties, including Actian Corporation, regarding their interest in acquiring Pervasive Software..."

 

Footnotes

[1]  LOEB CAPITAL MANAGEMENT Founded 1931 shortly after the onset of The Great Depression as Loeb, Rhoades & Co (1937-1979) Acquired by American Express in 1981.

12 Comments – Post Your Own

#1) On October 19, 2012 at 7:06 PM, gnulaw (54.24) wrote:

PVSW to announce Q1 FY13 numbers [2] Tuesday October 23rd at the close of market. 

"...In light of the company’s recently announced process to solicit potential acquisition bids from interested parties, the company does not intend to host the customary conference call following release of earnings results.  Financial data typically shared in the conference call will instead be disclosed in the published earnings announcement..." Source: Pervasive, October 19, 2012

This is very significant. PVSW has effectively ipso facto quid pro quo confirmed they will be acquired. No  "... including remaining independent and executing its existing strategic plans..." per their Aug 27 release (above).

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#2) On October 26, 2012 at 5:25 PM, gnulaw (54.24) wrote:

Q1 FY2013 ending September 30, 2012 - Pervasive Board Goes Hostile

Q1 FY13 Dead-End Database Division Revenues Increase as a % of Revenues, Integration Revenues Down, Big Data, Business XChange, and Galaxy Revenues Decrease (Table I). Continuing patterns of Board, Sr Mgt/Marketing gross negligence continue to hobble and destroy PVSWs shareholder value and future.

                             Q1 2013 [1]    Q1 2012 [2]   


Database                 64%               60%       

Integration                32%               35%         

BX, BD*                     4%               5%            

*Business Xchange, Big Data Divisions

Table I.

 

The Pervasive Board: Having Their Cake and Eating it Too

Note: Per comment #1 above the PVSW Board not only chose not to hold a conference call but they also explicitly state on their Q1 FY2013 formal disclosure "...There can be no assurance that the board's continued consideration of the Actian proposal or any alternative proposals that Pervasive may receive from any other parties will result in a transaction with Actian or any other party..." Note said statement below also blatantly gave the finger to Gideon King, Loeb, all Law Firms involved with Actian's proposed buyout concerned with fiduciary duty, and most importantly, all PVSW non-insider shareholders. This is a very very disturbing development.

"We executed well in the September quarter, resulting in our 47th consecutive quarter of profitability," said John Farr, president and CEO, Pervasive Software. "I'm particularly pleased with our execution this quarter given the potential for disruption related to the unsolicited proposal we received in August and the related announcements and activities since then.  Our database and integration products represented approximately 64% and 32%, respectively, of our total revenue while our Business Xchange and Big Data & Analytics products made up the remainder..."


Unsolicited Actian Proposal and Related Solicitation of Potential Bids

On September 12, 2012, Pervasive announced that its board of directors met to consider the advice of its independent financial advisor, Shea & Company, LLC, with respect to the evaluation of an unsolicited, non-binding proposal the company received from Actian Corporation on August 13, 2012. The board of directors instructed Shea & Company to solicit potential bids from interested parties and engage with those parties, including Actian Corporation, regarding their interest in acquiring Pervasive Software.  Shea & Company has contacted multiple potential bidders, and Pervasive has executed confidentiality agreements with and given presentations to a number of those potential bidders who have expressed interest.  This solicitation process will continue over the course of the coming weeks or months depending on multiple variables. In light of this ongoing process and as communicated on October 19, 2012, the company is not hosting the customary conference call following today’s earnings release.  There can be no assurance that the board's continued consideration of the Actian proposal or any alternative proposals that Pervasive may receive from any other parties will result in a transaction with Actian or any other party. Subject to applicable laws, currently the company does not intend to provide further updates regarding the board's consideration of these matters..." [emphasis added]

 

Footnotes

[1]  http: //www.pervasive. com/News/PressReleaseArchive/EntryId/1102/Pervasive-Software-Reports-Results-for-Its-First-Quarter-of-Fiscal-Year-2013.aspx

[2]  http: //seekingalpha. com/article/302166-pervasive-software-ceo-discusses-f1q2012-results-earnings-call-transcript

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#3) On October 27, 2012 at 10:37 AM, gnulaw (54.24) wrote:

Timeline Update (per original post above)

Timeline

June  4-22  Mike Hoskins, CTO and Board Director Dumps > $1M common stock days before end of F2012 ending June 30.

June 15 PVSW short position 23,758 shares

June 29 PVSW short position 559,704 shares

July 24 Pervasive announces Q4/FY 2012 Revenues/Earnings.  "...With $49 million in annual revenue we achieved our best annual revenue result in the last eight years..." -John Farr, July 24, 2012.

Note: Year 1 (2005) of "eight years" John Farr is referring to, Pervasive generated $48.4M in revenue. That comes out to a .23% annual increase over those eight years to finally reach $49.2M for Fiscal 2012. John Farr should have been removed for cause immediately after the conference call 

August 13 Actian Corp makes a public proposal to acquire Pervasive for $8.50/share Six law firms jump in between August 13 and August 16 to investigate the PVSW Board for Breach of Fiduciary Duty, in addition to whether the Pervasive Board of Directors is acting in shareholders’ best interests and whether the proposed consideration would be fair and adequate.

August 13  Lance Speck, VP, Pervasive's Integration Division, takes advantage of Actian Buyout Offer and Sells 15,000 shares effectively accepting said Actian offer as a duly authorized representative of (NASDAQ:PVSW).

August 26  Loeb Capital Management, 13D shareholder, send letter to PVSW Board stating "...To be clear, we view the failure to announce the commencement of a formal process to maximize value for shareholders through a competitive auction process that focuses solely on selling the Company to the highest bidder as a failure to satisfy the fiduciary duty the PVSW board of directors owes to the shareholders of the Company..."

August 27 Pervasive announces retaining Shea & Company LLC "...to assist and advise the Board of Directors in its evaluation of an unsolicited, non-binding proposal the Company received from Actian Corporation on August 13, 2012, as well as the Company’s other strategic alternatives, including remaining independent and executing its existing strategic plans..."

August 28 LOEB Capital (13D shareholder) sends above letter to PVSW Board of Directors.

September 12 Pervasive announced "...that its Board of Directors has met to consider the advice of its independent financial advisor, Shea & Company, LLC, with respect to the evaluation of an unsolicited, non-binding proposal the company received from Actian Corporation on August 13, 2012.  The Board of Directors has instructed Shea & Company to solicit potential bids from interested parties and engage with those parties, including Actian Corporation, regarding their interest in acquiring Pervasive Software..."

Oct 24  PVSW Board gives the finger to the SEC, Loeb Capital Management,  Rigrodsky & Long, Levi & Korsinsky, LLP, Faruqi & Faruqi, LLP,  Robbins Umeda LLP, The Briscoe Law Firm, Powers Taylor, LLP, and PVSW non-insider shareholders (per above).

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#4) On October 27, 2012 at 7:20 PM, gnulaw (54.24) wrote:

Timeline Update (In Re: Actian Buyout Offer)

June 1  PVSW closes at $7.03 on 29,500 shares volume.

June  4-22  Mike Hoskins, CTO and Board Director Dumps > $1M common stock days before end of FY2012 ending June 30.

June 15 PVSW short position 23,758 shares. PVSW closes at $6.80 on 38,300 shares volume.

June 29 PVSW short position 559,704 shares. PVSW closes at $7.49 on 55,900 shares volume.

July 24 Pervasive announces Q4/FY 2012 Revenues/Earnings.  "...With $49 million in annual revenue we achieved our best annual revenue result in the last eight years..." - John Farr, July 24, 2012.

Note: Year 1 (2005) of "eight years" John Farr is referring to, Pervasive generated $48.4M in revenue. That comes out to a .23% annual increase over those eight years to finally reach $49.2M for Fiscal 2012. John Farr should have been removed for cause immediately after the conference call 

August 10  (a Friday) PVSW closes at $6.55/share on 12,000 shares volume.

August 13 Actian Corp makes a public proposal to acquire Pervasive for $8.50/share Six law firms jump in between August 13 and August 16 to investigate the PVSW Board for Breach of Fiduciary Duty, in addition to whether the Pervasive Board of Directors is acting in shareholders’ best interests and whether the proposed consideration would be fair and adequate.

August 13  PVSW closes up 23.2% at $8.07 on 290,500 shares volume.

August 13  Lance Speck, VP, Pervasive's Integration Division, takes advantage of Actian Buyout Offer and Sells 15,000 shares at $8.00/share effectively accepting said Actian offer as a duly authorized representative of (NASDAQ:PVSW).

August 27 Pervasive announces retaining Shea & Company LLC "...to assist and advise the Board of Directors in its evaluation of an unsolicited, non-binding proposal the Company received from Actian Corporation on August 13, 2012, as well as the Company’s other strategic alternatives, including remaining independent and executing its existing strategic plans..."

August 28  Loeb Capital Management, 13D shareholder, sends above letter to PVSW Board stating "...To be clear, we view the failure to announce the commencement of a formal process to maximize value for shareholders through a competitive auction process that focuses solely on selling the Company to the highest bidder as a failure to satisfy the fiduciary duty the PVSW board of directors owes to the shareholders of the Company..."

September 12  Pervasive announced "...that its Board of Directors has met to consider the advice of its independent financial advisor, Shea & Company, LLC, with respect to the evaluation of an unsolicited, non-binding proposal the company received from Actian Corporation on August 13, 2012.  The Board of Directors has instructed Shea & Company to solicit potential bids from interested parties and engage with those parties, including Actian Corporation, regarding their interest in acquiring Pervasive Software..."

Oct 23  PVSW Board gives the finger to the SEC, Loeb Capital Management,  Rigrodsky & Long, Levi & Korsinsky, LLP, Faruqi & Faruqi, LLP,  Robbins Umeda LLP, The Briscoe Law Firm, Powers Taylor, LLP, and PVSW non-insider shareholders (See comment #2 above).

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#5) On October 27, 2012 at 7:51 PM, gnulaw (54.24) wrote:

Carter Shelby and Nancy Woodward, Directors [1], follow PVSW Officer Lance Speck's lead implicitly accepting Actian's ("BUYOUT OFFER")  pursuant to SEC FORM 4's filed on October 26 [2].

 

Footnotes:

[1]  pervasive. com/Company/BoardofDirectors.aspx

[2]  nasdaq. com/symbol/pvsw/sec-filings

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#6) On November 05, 2012 at 7:22 PM, gnulaw (54.24) wrote:

(Sep 13, 2012) Prediction: PVSW will be acquired for $9.00-$9.50 by Actian or north of $9.50 by another party perhaps Opera Software, Actuate:BIRT, INTU, et al... Source: gnulaw caps.fool. com/Blogs/pervasive-software-pvsw-in/755051 (comment #18)

Update: (November 05, 2012) In Play - Actian Ups Takeover Bid to $9/Sh - Source: Barron's blogs.barrons. com/techtraderdaily/2012/11/05/pervasive-rising-actian-ups-takeover-bid-to-9sh/

 

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#7) On November 05, 2012 at 7:43 PM, gnulaw (54.24) wrote:

Timeline Update (In Re: Actian Buyout Offer)

June 1  PVSW closes at $7.03 on 29,500 shares volume.

June  4-22  Mike Hoskins, CTO and Board Director Dumps > $1M common stock days before end of FY2012 ending June 30.

June 15 PVSW short position 23,758 shares. PVSW closes at $6.80 on 38,300 shares volume.

June 29 PVSW short position 559,704 shares. PVSW closes at $7.49 on 55,900 shares volume.

July 24 Pervasive announces Q4/FY 2012 Revenues/Earnings.  "...With $49 million in annual revenue we achieved our best annual revenue result in the last eight years..." - John Farr, July 24, 2012.

Note: Year 1 (2005) of "eight years" John Farr is referring to, Pervasive generated $48.4M in revenue. That comes out to a .23% annual increase over those eight years to finally reach $49.2M for Fiscal 2012. John Farr should have been removed for cause immediately after the conference call 

August 10  (a Friday) PVSW closes at $6.55/share on 12,000 shares volume.

August 13 Actian Corp makes a public proposal to acquire Pervasive for $8.50/share Six law firms jump in between August 13 and August 16 to investigate the PVSW Board for Breach of Fiduciary Duty, in addition to whether the Pervasive Board of Directors is acting in shareholders’ best interests and whether the proposed consideration would be fair and adequate.

August 13  PVSW closes up 23.2% at $8.07 on 290,500 shares volume.

August 13  Lance Speck, VP, Pervasive's Integration Division, takes advantage of Actian Buyout Offer and Sells 15,000 shares at $8.00/share effectively accepting said Actian offer as a duly authorized representative of (NASDAQ:PVSW).

August 27 Pervasive announces retaining Shea & Company LLC "...to assist and advise the Board of Directors in its evaluation of an unsolicited, non-binding proposal the Company received from Actian Corporation on August 13, 2012, as well as the Company’s other strategic alternatives, including remaining independent and executing its existing strategic plans..."

August 28  Loeb Capital Management, 13D shareholder, sends above letter to PVSW Board stating "...To be clear, we view the failure to announce the commencement of a formal process to maximize value for shareholders through a competitive auction process that focuses solely on selling the Company to the highest bidder as a failure to satisfy the fiduciary duty the PVSW board of directors owes to the shareholders of the Company..."

September 12  Pervasive announced "...that its Board of Directors has met to consider the advice of its independent financial advisor, Shea & Company, LLC, with respect to the evaluation of an unsolicited, non-binding proposal the company received from Actian Corporation on August 13, 2012.  The Board of Directors has instructed Shea & Company to solicit potential bids from interested parties and engage with those parties, including Actian Corporation, regarding their interest in acquiring Pervasive Software..."

October 23  PVSW Board gives the finger to the SEC, Loeb Capital Management,  Rigrodsky & Long, Levi & Korsinsky, LLP, Faruqi & Faruqi, LLP,  Robbins Umeda LLP, The Briscoe Law Firm, Powers Taylor, LLP, and PVSW non-insider shareholders (See comment #2 above).

November 05 PVSW closes at $8.53 on appx .29X ADV (3 mo)

November 05 In Play - Actian Ups Takeover Bid to $9.00/Share

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#8) On December 07, 2012 at 2:10 AM, gnulaw (54.24) wrote:

(NASDAQ:PVSW) Board aka non-insider shareholder-funded Insider ATM continues patterns of alleged gross negligence. Issues massive amount of shares to Directors at $0.00 on Dec 4 2012 in defiance of failure to create shareholder value, failure to increase revenues over ten years, and failure to negotiate a buyout.

See Jan 5 2012 [1] post -

Share buybacks:In Perspective

PVSW Board turns on insider ATM again... issued 280,000 shares at $.01 cost to insiders between Dec 1 and Dec 30 at a valuation of $1,646,000 based on transaction date closing price (Dec 1 and Dec 30 2011). 

 

References:

[1] (Oct 28 2011) OPS OCCUPY PERVASIVE SOFTWARE - (NASDAQ:PVSW) Q1 Fiscal 2006 v Q1 Fiscal 2012 (Comment #16)

[2] (Aug 11 2012)  [Update1] (Pervasive:PVSW) What's Wrong With This Picture?

[3] (Apr 29 2012) $PLUNK IPO. PVSW - SPLK: In Perspective PVSW - Q3 Ending March 31, 2012

 

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#9) On January 19, 2013 at 11:21 PM, gnulaw (54.24) wrote:

(Dec 21, 2012) Actian Corporation Completes Acquisition of Versant

Actian Acquires Versant (an industry leader in building specialized NoSQL data management systems) to Expand Portfolio of Big Data Solutions

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#10) On January 20, 2013 at 8:48 AM, gnulaw (54.24) wrote:

>>(Dec 21, 2012) Actian Corporation Completes Acquisition of Versant

(Nov 21, 2112) Versant (NASDAQ:VSNT) Agrees to be Acquired by Actian for $13.00 per Share

 

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#11) On January 29, 2013 at 1:00 AM, gnulaw (54.24) wrote:

(Jan 28 2013) Actian and Pervasive Software Merge to Create a Disruptive Force in Big Data [1]

Actian Expands Its Portfolio of Innovative Big Data Solutions to Strengthen its Position as a Major Global Player in the $27bn* Big Data Market

(Jan 28 2013)  Pervasive Software to be acquired by Actian for $161.9 million [2]

[1] boardvote. com/symbol/PVSW/communique/197310

[2] reuters. com/article/2013/01/29/us-pervasivesoftware-offer-idUSBRE90S04420130129

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#12) On February 03, 2013 at 7:58 AM, gnulaw (54.24) wrote:

Alleged Pervasive PVSW Stock Fraud continues? Pervasive again hit by multiple investigations into possible breaches of fiduciary duty in re: Pervasive's definitive agreement to be acquired by Actian.

Shea and the Pervasive Board failed to find buyer(s) outside Actian's arguable self-proclaimed hostile takeover at absurd price of $9.20/share. Said failure confirms either alleged collusion and stock fraud or confirmed alleged stock fraud, collusion, and criminal gross negligence on the part of Pervasive's Board of Directors. Said failure further confirms Pervasive had no IP given the absurdly low offer price, Pervasive's cash position, and Pervasive's lead in Big Data. If not, then what was Actian purchasing?  Why were they so determined to acquire when [seemingly] no one else was interested? Was their collusion on the part of Actian and Pervasive? Note: Pervasive failed to materially increase revenues since 2004. Pervaise Board also issued tens of thousands additional shares to its Board in December 2012, DURING SAID ALLEGED HOSTILE TAKEOVER. The Pervasive Board and Senior management were simply infested by alleged fraud where Pervasive became nothing more than a personal ATM for said insiders as confirmed by consistent patterns of said alleged fraud as meticulously cited on this blog. (See all references and all comments to said referenced links).

References (Including but not limited to)

)   PVSW Non-Insider Shareholders v. Actian, Pervasive Software

)   In Re: ( April 29, 2012 ) $PLUNK IPO. PVSW - SPLK: In )Perspective PVSW - Q3 Ending March 31, 2012 (including  )comments 11, 12, 13, 15, 16, 19)

)  ( June 29, 2012 ) (Pervasive:PVSW) What's Wrong With This Picture? (incuding comments 1-17)

)  ( August 11, 2012 ) [Update1] (Pervasive:PVSW) What's Wrong With This Picture? (including comments 1-11).

)

)   and further allege as follows pursuant to the following incorporated references

)

1.  (April 29, 2012)  $PLUNK IPO. PVSW - SPLK: In Perspective PVSW - Q3 Ending March 31, 2012 (Including comments 1-19)

2.  (March 23, 2012)  Is Pervasive's (NASDAQ:PVSW) Future / Shareholder Value Hiding in Plain Sight? (Including comments 1-10)

3.  (Jan 28, 2012)  PVSW - Q2 2012 Ending 31 Dec 2011 (Including comments 1-8)

4.  January 12, 2012 (NASDAQ:PVSW) Non-insiders Sustain Shareholder Value Destruction As Insiders Award Themselves $1.6M  (Including comment #1)

5.  October 28, 2011 OPS OCCUPY PERVASIVE SOFTWARE - (NASDAQ:PVSW) Q1 Fiscal 2006 v Q1 Fiscal 2012 (Including comments #1 - #20)

6.  September 02, 2011  (NASDAQ:PVSW) 2011 Sees No Insider Buying But Much Insider Selling, Share Buybacks a Sham? (Including comments #1 - #20)

 

 

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