Monday, May 16, 2005

CoSine Terminates Merger with Tut

CoSine Communications terminated its merger agreement with Tut Systems.

In a statement, CoSine said "We took action today to terminate the merger agreement as the proposed transaction was unlikely to gain shareholder approval, given current market conditions."

Tut Systems responded, stating "We continue to believe that a merger with Tut Systems represents the best realistic alternative for CoSine, its stockholders and its customers."

  • In January 2005, Tut Systems announced plans to acquire Cosine Communications for in a stock-for-stock transaction valued at approximately $24.1 million. At the time, Tut Systems said it was acquiring Cosine primarily to provide additional financial resources. Tut Systems said it would honor Cosine's existing customers' support agreements, but did not expect to offer its products for sale to new customers. Tut Systems will incorporate Cosine's intellectual property into its growing IP portfolio. Tut Systems will not have any additional employees or facilities as a result of the transaction.

  • In September 2004, CoSine initiated actions to wind down its operations. CoSine's management team and its Board of Directors concluded that "maintaining the company's existing employee headcount was not necessary for any of the strategic alternatives currently under consideration and the ongoing employee-related expenditures could potentially decrease total stockholder value."

  • CoSine Communications was founded in 1998 and was based in Redwood City, California. The company completed its IPO in September 2000, selling 10 million shares at $23 per share.

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