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Baan slumps as CEO quits
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January 4, 2000: 6:01 a.m. ET
Dutch business software firm takes $200M 4Q charge and reorganizes
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LONDON (CNNfn) - Investors punished the latest restructuring by Dutch business software group Baan Tuesday, as the company announced an unexpected fourth-quarter loss and the departure of its chief executive.
The move was viewed by analysts as a thinly-veiled profit warning, prompting a round of downgrades and sending the stock plummeting more than 27 percent to 10.72 euros in morning trade in Amsterdam.
Baan chief executive Mary Coleman resigned after just six months in the post "to pursue other technology-related opportunities nearer her home in Silicon Valley", according to a company statement.
Analysts suggested a weakened Baan could become a takeover target after the latest share slide.
"If the shares drop to 7 euros the company could be ripe for a takeover, and that is probably [for] the best." Thijs Berkelder at HSBC told Reuters. HSBC was among a host of brokers to lower its recommendation on the stock, cutting to sell from hold.
U.S. rivals such as Oracle (ORCL) and PeopleSoft (PSFT) have been floated as possible buyers for Baan.
The troubled company has undergone a series of restructurings in recent years, plunging it into the red. Efforts to focus on the business-to-business electronic-commerce market mean that figures for the final quarter of 1999 will include extra costs of $200 million, while the overall loss for the quarter is likely to be up to $250 million, the company said. Analysts previously expected Baan to make a profit.
The company said the latest plan - which includes the closure of 14 offices and a staff reduction of 4 percent - would save $25 million per quarter.
Coleman took over as CEO just six months ago after a disastrous run for the company ended in the departure of Tom Tinsley. Supervisory board chairman Pierre Everaert will act as interim chief executive until a permanent replacement can be found.
Baan, which ranks second in the European market for business software behind Germany’s SAP, has suffered as customers postponed placing orders for its enterprise resource planning software. These are programs which organize a company's internal workings, such as accounting and human resources. Investment was curtailed last year amid concern about the millennium bug.
Baan (BAANF) shares, quoted on the Nasdaq as well as in the Netherlands, have recovered somewhat in Amsterdam this year, reaching almost 15 euros after starting the year at around 10 euros. However, that pales beside the peak of 48 euros reached in May 1998. 
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