Mitchell-Wright Technology Group Reiterates Reasons to Vote Against Art Technology Group, Inc.'s Proposed Merger with Primus Kno
12 Oktober 2004 - 9:28PM
PR Newswire (US)
Mitchell-Wright Technology Group Reiterates Reasons to Vote Against
Art Technology Group, Inc.'s Proposed Merger with Primus Knowledge
Solutions, Inc. CINCINNATI, Oct. 12 /PRNewswire/ -- Mitchell-Wright
Technology Group, LLC ("MWTG") today underscored the risks
associated with relying on the assumptions outlined in the ISS
proxy analysis of the proposed merger between Art Technology Group,
Inc. ("ARTG" or the "Company") (NASDAQ:ARTG) and Primus Knowledge
Solutions, Inc. ("Primus") (NASDAQ:PKSI). Although MWTG generally
agrees with ISS' approach in their analysis of the transaction,
MWTG disagrees with their conclusion. The fundamental difference
between ISS and MWTG analysis lies in the assumptions used to
develop the conclusions. ISS relies on management's forecasts of
revenue growth and estimates of operating cash flow to support
their conclusions. MWTG, instead, analyzed management's projections
in the context of management's historical performance, as well as,
current performance trends exhibited by both ARTG and Primus. A
review of historical performance shows that ARTG management has
missed their guidance for three of the last four quarters and for
the past two full years. An examination of the current revenue
trend shows that ARTG has not posted two consecutive quarters of
revenue growth in the last fifteen quarters and that ARTG has
experienced a revenue decline of almost 30% over the past eight
quarters. On a combined basis, the two companies have experienced
over a 40% decline in revenue during the previous ten quarters and
have also failed to produce two consecutive quarters of revenue
growth during that period. As a result of the historical
performance analysis, during discussions with the Board, MWTG
reviewed the Company's post-merger operating plan and requested the
Company commit to certain threshold criteria on cash, profitability
and expense management consistent with management's plan. The
threshold criteria served as indicators that the Primus merger
would be accretive to ARTG operations. When the Company rejected
accountability to certain minimum thresholds tied to management's
own plan, MWTG questioned the Board and management's commitment to
their public statements and concluded that (i) the merger with
Primus would not be accretive and (ii) that the Board and
management would again fail to enhance shareholder value. MWTG
maintains its position that the Board and management has failed to
do the following: 1. Protect and grow cash by improving the
operating performance beyond what management has delivered over the
past two years; 2. Align costs with realized revenues to achieve
sustainable, profitable operations; 3. Achieve forecasted revenue
growth; and 4. Enhance ARTG shareholder value, after having lost
more than 60% of the stock's value in the last year, measured by
the record date for the vote on the merger. The merger with Primus
further harms shareholder value in the following ways: 1. Fails to
protect cash. The true cash cost of the acquisition is likely
greater than what management has guided. MWTG has asked management
to address this issue publicly. 2. Fails to plan realistic revenue
growth by promoting forecasted revenue growth in excess of 4% per
quarter; when neither company has been able to put together
consistent quarterly growth. 3. Adds unnecessary risk to the
business. 4. Causes dilution to the ARTG shareholders in excess of
the contribution of the Primus business. MWTG asks shareholders why
they would rely on assumptions presented by a management team that
has consistently missed their guidance. In addition, MWTG asks
shareholders why they would trust a management team that would not
commit to minimum thresholds on cash, profitability and cost
management that would make the merger accretive to the business.
Management proposes a plan that fails to protect ARTG shareholders
by proposing a dilutive transaction with a failing business and by
not taking the necessary steps to make the transaction accretive to
cash and earnings. Profitable, independent operations with a
profitable growth plan offers a greater opportunity to enhance ARTG
shareholder value and puts ARTG in a better position to control its
future strategic alternatives. MWTG will vote AGAINST Art
Technology's proposed merger with Primus, and MWTG urges you to
vote AGAINST the merger as well. We will soon be mailing you our
proxy materials that will contain detailed information about our
reasons for opposing the merger. UNTIL YOU RECEIVE THAT
INFORMATION, WE URGE YOU NOT TO RETURN ANY PROXY CARD SENT TO YOU
BY ATG'S BOARD AND MANAGEMENT. For more information, please visit
http://www.saveatg.com/. Mitchell-Wright Technology Group, LLC,
Mitchell-Wright, LLC, SSH partners I, LP, Arcadia Partners, L.P.,
Arcadia Capital Management, LLC, James Dennedy and Richard Rofe are
participants in a solicitation of proxies from the shareholders of
Art Technology Group, Inc. for use for use at its special meeting
scheduled to be held on October 22, 2004. Information relating to
these participants and certain other persons who may also be deemed
to be participants in the solicitation of proxies is contained in
their proxy statement filed with the Securities and Exchange
Commission on October 8, 2004. Shareholders are advised to read the
proxy statement and the other documents related to the solicitation
of proxies by Mitchell-Wright Technology Group, LLC and the other
participants because they contain important information. A copy of
the proxy statement is being mailed to shareholders and is
currently available at no charge on the Securities and Exchange
Commission's website at http://www.sec.gov/. In addition, you may
also obtain a free copy of the proxy statement by contacting
Innisfree M&A Incorporated toll free at (888) 750-5834 (banks
and brokers call collect at (212) 750-5833). CONTACT: Ellen Gonda
Brunswick Group (212) 333-3810 DATASOURCE: Mitchell-Wright
Technology Group, LLC CONTACT: Ellen Gonda of Brunswick Group,
+1-212-333-3810, for Mitchell-Wright Technology Group, LLC Web
site: http://www.saveatg.com/
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