Chance of Oracle deal affects i2 stock; Playboy shares decline on deal fallout; FGX takes bid

By Cristal Cody

Tupelo, Miss., Dec. 16 - JDA Software Group, Inc. said Wednesday it cleared the antitrust waiting period for its $434 million takeover of i2 Technologies, Inc.

But shares of i2 jumped above JDA's bid of $18.00 a share in cash and stock on the potential of Oracle Corp. as a rival bidder, an analyst told Prospect News.

Also on Wednesday, shares of Playboy Enterprises Inc. dropped more than 10% following reports that deal talks with Iconix Brand Group Inc. fell through.

In other situations, U.S. eyeglass manufacturer FGX International Holdings Ltd. said Wednesday it accepted a $465 million cash buyout offer from French corrective eye lenses maker Essilor International.

Meanwhile, stocks were mixed on Wednesday.

Investors sent the Dow Jones Industrial Average down 10.88 points, or 0.10%, to close at 10,441.12.

The Standard & Poor's 500 index rose 1.25 points, or 0.11%, to 1,109.18. The Nasdaq Composite index advanced 5.86 points, or 0.27%, to 2,206.91.

Oracle talk spurs i2 shares

Scottsdale, Ariz.-based JDA's offer for Dallas-based i2 still must receive approval from i2 shareholders.

The two supply chain solutions companies sought a merger last year, but the deal fell apart when JDA could not complete the financing.

The deal includes a termination fee of $30 million if JDA fails to close the merger due to lack of financing. The transaction is expected to close in the first quarter of 2010.

James Friedman, an analyst with Susquehanna Financial Group, LLLP, told Prospect News on Wednesday that because of i2's patent litigation against software maker Oracle, there is "some prospect that Oracle might buy them rather than settle with them. It certainly seems like if JDA doesn't get it done, someone else will."

JDA's offer for i2 is a fair valuation, Friedman said, but for "Oracle to buy them, they would have to pay 50 cents more than the bid. That would be the breakup fee."

Shares of i2 closed at $18.66, up 21 cents, or 1.14%.

JDA shares added 61 cents, or 2.63%, to close at $23.84.

Shares of Santa Clara, Calif.-based Oracle shed 4 cents, or 0.18%, to finish at $23.12.

Playboy deal a bust

Both Playboy Entertainment and Iconix had no comment on the reports that a deal for Iconix to license Playboy's brand fell apart.

Playboy's shares closed down 38 cents, or 9.90%, at $3.46, while shares in Iconix gained 36 cents, or 3.01%, to $12.34.

Shares of Chicago-based Playboy Entertainment had soared more than 42% in November on reports of a potential deal with New York-based Iconix, which owns and licenses clothing brands such as Candie's, Joe Boxer, Rampage and Mossimo.

On Nov. 24, Playboy Entertainment said it would outsource all of the magazine's production, advertising and other functions excluding editorial content to publisher American Media, Inc. as a way to cut costs.

Playboy Entertainment said that the magazine is expected to lose $8 million for the year. The loss is expected to be reduced to $5 million in 2010 through the agreement with American Media, with expectations of profits by 2011.

Playboy Entertainment said in a statement on Tuesday that it has appointed Robert D. Campbell as interim chief financial officer effective Jan. 1.

The company said Campbell, who's been with Playboy since 1992 and is currently treasurer, will oversee the company's financial, treasury, accounting and technology functions. Playboy said it has hired BridgeGate LLC to lead a search for a permanent CFO.

No outright sale of the company is expected in the near-term, said one analyst.

"Playboy makes no money," the analyst said. "The returns on investment in Playboy are negative."

Eyeglass maker takes bid

FGX will merge with Charenton-le-Pont, France-based Essilor, which produces optical products to correct vision problems.

Under the terms, FGX shareholders will receive $19.75 a share in cash, which represents a 10% premium over the company's closing stock price on Tuesday.

The total deal is valued at $565 million and includes the assumption of about $100 million of FGX debt.

FGX produces non-prescription reading glasses and sunglasses under brands that include FosterGrant and licenses under Levi Strauss Signature.

"Demand for non-prescription reading glasses is growing," Hubert Sagnières, Essilor's chief operating officer and CEO-designate, said in a statement. "In addition, the market fits well with our prescription lens business and is supported by favorable demographic trends."

FGX's headquarters will remain in Smithfield, R.I.

FGX representatives did not return a call for additional information.

The transaction, subject to FGX shareholder approval and regulatory clearances, is expected to close in 2010.

FGX said majority shareholder Berggruen Holdings North America Ltd., which owns about 32% of the company's shares, and senior management have agreed to vote in favor of the transaction.

The deal includes an $18.3 million termination fee payable by FGX to Essilor in the event a superior unsolicited offer is accepted.

Shares of FGX closed up $1.59, or 8.88%, at $19.50.

Essilor's stock fell 8.68% to €31.05.

Mentioned in this article:

Essilor International Paris: EINV

FGX International Holdings Ltd. Nasdaq: FGXI

i2 Technologies, Inc. Nasdaq: ITWO

Iconix Brand Group Inc. Nasdaq: ICON

JDA Software Group, Inc. Nasdaq: JDAS

Oracle Corp. Nasdaq: ORCL

Playboy Enterprises Inc. NYSE: PLA

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