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Ashton-Tate Cancels Stock Sale, Cites Price Volatility

April 07, 1987|DONNA K. H. WALTERS | Times Staff Writer

Ashton-Tate is withdrawing a previously announced public offering of about 2 million shares of stock, the company said Monday.

The Torrance-based software developer said it was reacting to the recent volatility in its shares. "We want to get the appropriate amount of money for our stock and we want our investors to feel they've paid a fair price," said Stanley P. Witkow, Ashton-Tate's general counsel. Witkow said the company had not determined when the offering might be made.

The company's stock closed up 50 cents at $24 a share in heavy trading Monday in the over-the-counter market. In the first three months of the year, the stock price has bounced between $21.25 and $29. In an offering of 2 million shares, the difference between the high and low price would be $15.5 million.

Analyst Brian L. Mutert of Robertson, Colman & Stephens in San Francisco places the issue's value at $30 to $33 a share, based on a comparison to the leading software company, Lotus Development. Mutert said he believes that the primary reason for the withdrawal is that Ashton-Tate feels the price of its stock is too low now.

Part of the stock's volatility in the past week is related to recent announcements by International Business Machines, analysts and the company said. Among those, IBM has introduced new versions of its personal computers and said it would offer its own database management software on its PCs. Ashton-Tate's best-selling product, dBase III Plus, is also the best-selling database program for IBM and IBM-compatible desktop computers.

Mutert said the software offering by IBM, which probably won't be available until late 1988, will overlap with Ashton-Tate's product but should not substantially affect the company.

Ashton-Tate announced the planned offering March 2, at the same time that it reported record earnings for the year ended Jan. 31. The company posted net income of $30.1 million on revenue of $210.8 million.

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