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-business infrastructure software, lowered its outlook for the quarter ending this month 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 planned March 26th shareholder meetings related to their planned merger, in order to give 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 -- of creating the industry leader in e-business infrastructure management and intelligence solutions," Hwang and WebTrends chief executive officer Eli Shapira added in a joint statement.

NetIQ agreed to buy 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 shares for each of their shares. NetIQ shareholders would own about 76 percent of the 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 third quarter ending March 31st, with earnings before acquisition-related costs and amortization of goodwill and other intangibles of 13 to 17 cents per share.

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 the current quarter, reports said.