www.srtilley.com |
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According to today's Wall Street Journal, Rational Software
Corp. agreed to buy Pure Atria Corp. in a stock swap valued at $515 million. The deal was
originally worth $884 million, but the stock of both companies plunged 42% right after the
announcement. Rational shares fell $9.75 to $13.625, and Pure Atria fell $7.75 to $10. Analysts
say the drop in share price was due to Pure Atria announcing lower than expected profits
for 1Q97, and momentum investors selling when they heard of the merger. Seems they don't
think the merged company can produce the kind of numbers they want in the near future.
Pure Atria was also having problems with its previous merger of Pure Software and Atria
last June. The head sales people for both companies left soon after they merged. Rationale
itself has been on an acquisition spree of late.
Today on the NASDAQ, Rational closed at $14.50, Pure Atria at $9.12.
Rational: www.rational.com
Pure Atria: www.pureatria.com |
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