The Board of Directors of Covisint Has Recommended Shareholders Vote "FOR" to Approve the Sale of Covisint to Open Text
Institutional Shareholder Services (ISS), Glass, Lewis & Co. and Egan-Jones All Recommend Shareholders Vote "FOR" the Sale of Covisint to Open Text
DETROIT, July 21, 2017 (GLOBE NEWSWIRE) -- Covisint Corporation (Nasdaq:COVS) today responded to Dialectic Capital Management LLC's ("Dialectic") July 19, 2017 letter to Covisint's shareholders wherein Dialectic announced its intention to vote against OpenText's™ (NASDAQ:OTEX) (TSX:OTEX) acquisition of Covisint.
In recommending that Covisint shareholders vote "FOR" the Open Text Merger Agreement, Covisint issued the following statement:
Many of the assertions and analyses in the Dialectic letter are inaccurate or otherwise do not properly portray Covisint's current business prospects. To cite a few:
In considering growth prospects for the Company that would likely increase shareholder value, the Board asked the Company's management to prepare a Sensitized Case set of projections (as discussed in detail in the Company's Proxy Statement) for analysis and discussion. The Company's growth prospects under various scenarios, including under the Sensitized Case approach, was thoroughly discussed by the full Board on multiple occasions, with input from the Company's financial advisor, as well. Numerous factors were discussed and considered, including how a Sensitized Case approach might adversely impact the Company's customer base. Considering and debating a Sensitized Case set of projections was a useful exercise, as it confirmed that pursuing that approach was not a realistic strategy for the Company. The downside risk with such an approach far outweighed the potential that the Company could achieve the results and the Board unanimously voted to proceed with the proposed transaction.
The $2.45 price per share was the result of a very lengthy and very broad sales process, wherein the Company and its financial advisors contacted (or were contacted by) a total of 52 potential bidders, both financial and strategic. The Company used high-quality, internationally recognized financial advisors to guide the Company through the process and to negotiate the highest price per share that a potential acquirer was willing to pay. While there were discussions and meetings with other potential third party acquirers over a period of more than 15 months, other than Open Text, those potential acquirers definitively indicated that they had either determined not to pursue a transaction to purchase the Company or they were not willing to offer a purchase price at or above $2.45 per share.
The $2.45 per share all-cash merger consideration provides the Company's shareholders with certainty of value and immediate liquidity, while reducing the market and long-term business risks, including risks related to the Company's historical operating results and future growth prospects.
In addition, Covisint announced that Institutional Shareholder Services ("ISS"), Glass, Lewis & Co. ("Glass Lewis") and Egan-Jones recommend that Covisint shareholders vote in favor of the merger.
Covisint's upcoming Special Meeting is important in delivering the best outcome for our shareholders. Covisint shareholders of record as of the close of business on June 15, 2017 are entitled to vote at the Special Meeting.
The Covisint Board's unanimous recommendation is that you vote "FOR" the Proposal to Approve the Sale of the Company to Open Text for $2.45 per share.
We thank you for your continued support of Covisint and hope you will attend Tuesday's Special Meeting.
/s/ John F. Smith
John F. Smith, Chairman of the Board of Directors
About Covisint Corporation
Covisint is the connected company — we securely connect ecosystems of people, systems and things to enable new service offerings, optimize operations, develop new business models and ultimately enable the connected economy. Today, we support more than 2,000 organizations and connect to more than 212,000 business partners and customers worldwide. Learn more at www.covisint.com.
Safe Harbor for Forward-Looking Statements
This press release contains forward-looking statements, including statements regarding Covisint's present and future technology design, architecture, performance and operations which affects the Covisint IoT Platform's market growth and the demand for Covisint's solutions. Any forward-looking statements contained in this press release are based upon Covisint's historical performance and its current plans, estimates and expectations and are not a representation that such plans, estimates, or expectations will be achieved. These forward-looking statements represent Covisint's expectations as of the date of this press release. Subsequent events may cause these expectations to change, and Covisint disclaims any obligation to update the forward-looking statements in the future except as may otherwise be required by the federal securities laws. These forward-looking statements are subject to known and unknown risks and uncertainties that may cause actual results to differ materially. Important factors that could cause actual results to differ materially from those in the forward-looking statements include, but are not limited to, Daimler's ability non-renew the purchase order or to terminate our contract for convenience. Further information on potential factors that could affect actual results is included in Covisint's reports filed with the SEC.
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