Software: BroadVision Buyout in Trouble

The lack of shareholder approval for the struggling software company’s $29-million buyout could push it to bankruptcy.
By Priya Ganapati
November 4, 2005

Nearly three months after buyout specialist Vector Capital said it would buy struggling software firm BroadVision, just over 40 percent of BroadVision’s shareholders have voted for the deal, putting the buyout process and the publicly traded company in jeopardy, the companies said.

The issue isn’t so much that shareholders are against the deal but rather that the holders simply aren’t voting. Delaware-incorporated BroadVision needs 51 percent of all shareholders to vote before a motion can be approved or denied.

This is a tougher standard than in some other states, where a majority vote solely from actual votes—not necessarily all shareholders—is considered sufficient. In some other states, a non-vote is considered a vote against the proposal.

“The conventional wisdom is that shareholders will mostly vote for a buyout like this,” said Chris Nicholson, partner at Vector Capital in San Francisco. “But we are in a peculiar situation here where it is not like shareholders are voting ‘no,’ but they are just not voting.”

Founded in 1993, the once high-flying BroadVision makes software to help enterprises create portals and e-business infrastructure. Vector Capital agreed in July to buy BroadVision for $29 million, a big discount.

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