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The Green SheetGreen Sheet

Monday, September 12, 2011

S1 urges stockholders to ignore hostile bid

Payment software company S1 Corp., locked in a fight for its life with ACI Worldwide Inc., is urging stockholders to ignore a sweetened ACI offer to buy S1. ACI has offered $6.20 in cash and 0.1064 shares of ACI common stock for each S1 share held. This is an increase of 50 cents a share over ACI's original offer.

S1's preference is to move forward with its $320 million offer to buy and merge with Israeli payment processing company Fundtech. Soon after S1 went public with its ambitions to merge with Fundtech ACI ambushed S1 with its $540 million offer to buy S1. When S1 rejected the ACI overture, ACI filed a proxy notice with the U.S. Securities and Exchange Commission and urged S1 stockholders to vote against the merger in favor of its offer to buy S1.

S1 continues after Fundtech

The S1 board of directors continues to pursue the Fundtech merger while fighting off the ACI advances. ACI's offer turned hostile on Aug. 25, 2011, when it made its increased offer. ACI told S1 stockholders its offer is good up to a maximum of 62 percent of S1 shares exchanged for cash and 38 percent of S1 exchanged for common stock. ACI notes the value of the cash offer exceeds the value of the stock.

“ACI is committed to taking the necessary actions to complete our proposed acquisition of S1, and we believe [the enhanced offer] is the next step forward in this process,” said ACI President and Chief Executive Officer Philip Heasley. “Given the uncertain and volatile market conditions, we have enhanced the cash component of our proposal to provide additional certainty and value for S1 shareholders.”

ACI prefers negotiated settlement

Heasley said he was hoping for a less acrimonious resolution to the situation. "While it remains our strong preference to enter into a negotiated transaction with S1, we believe taking our premium cash and stock offer directly to S1's shareholders is the best way to advance this compelling combination," he said. "We believe that ACI's enhanced proposal is clearly superior to and provides S1 shareholders with far greater value than the Fundtech transaction. We remain resolute in our commitment to take the steps necessary to complete this transaction."

S1 issued a statement saying the S1 board of directors will "consider and review" the new offer. It has scheduled a special stockholder meeting Oct. 13, 2011, to vote on the Fundtech merger. "Until the S1 Board of Directors advises stockholders of its position, S1 stockholders are urged to take no action with respect to the exchange offer," S1 said in a release. end of article

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