NetIQ, WebTrends Tumble on Merger Delay

NetIQ (Nasdaq: NTIQ) fell US$3.31 to $16.81 in morning trading Thursday after the company, which makes e-businessinfrastructure software, lowered its outlook for the quarter ending thismonth and delayed planned shareholder votes on the acquisition of WebTrends (Nasdaq: WEBT).

WebTrends, meanwhile, lost $1.53 to $8.41.

Because of the announcement, NetIQ and WebTrends said they postponed plannedMarch 26th shareholder meetings related to their planned merger, in order togive their stockholders time to consider the news. The meetings have been rescheduled for March 30th.

“Like many other companies, we are feeling the impact of a slowing economy,” said NetIQ chief executive officer Ching-Fa Hwang.

“We continue to believe in the strategic rationale for the merger — ofcreating the industry leader in e-business infrastructure management andintelligence solutions,” Hwang and WebTrends chief executive officer Eli Shapira added in a joint statement.

NetIQ agreed tobuy WebTrends in January for $36 per share in stock. At the time,WebTrends shares traded at $30.50 and NetIQ shares were at $62.25.

The agreement would give WebTrends shareholders 0.480 NetIQ common sharesfor each of their shares. NetIQ shareholders would own about 76 percent ofthe combined company, and WebTrends shareholders would hold 24 percent.

In its revenue warning, NetIQ said it expects revenue of $37 million to $40 million for the thirdquarter ending March 31st, with earnings before acquisition-related costsand amortization of goodwill and other intangibles of 13 to 17 cents pershare.

A year earlier, the company earned 11 cents per share on revenue of$10.9 million. Analysts had expected earnings of 21 cents per share for thecurrent quarter, reports said.

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