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April 5, 2004

Obsidian closes net perceptions chapter

Holding company Obsidian Enterprises Inc has given up its attempts to buy fallen customer interaction software star Net Perceptions Inc by withdrawing its revised exchange offer. The Indianapolis, Indiana based holding company has been courting Net Perceptions for several months now without much success.

By CBR Staff Writer

In the absence of any other bidders, Obsidian’s move is likely to signal the end of the corporate road for Edina, Minnesota-based Net Perceptions’.

Obsidian withdrew its revised exchange offer after Net Perceptions sold its patent portfolio last week, which violated one of the conditions set forth by Obsidian.

Net Perceptions sold its patents to Thalveg Data Flow LLC for $1.8m. It also granted an unnamed party a nonexclusive code license to a product that was discontinued in 2002. The license sale is valued at less than 350,000.

Obsidian had offered 25 cents per share and three shares for Obsidian stock for 100 Net Perceptions stock.

Obsidian’s revised offer was due to expire on April 15. Tom Donnelly, Net Perceptions’ CFO declined to comment on the withdrawal.

Net Perceptions’ board has favored an insolvency plan that it drafted back in October last year. With $12.2m in cash, this would have netted shareholders around 40 cents a share before expenses. But the board has made a hash of convincing shareholders which has left the company in corporate limbo and still seeking an exit strategy.

Obsidian, an unlikely suitor, stepped into the frame with an offer earlier this year which wasn’t much more than Net Perceptions’ liquidation value. Many questioned Obsidian’s intentions considering its diversified portfolio of operations that include everything from celebrity entertainer coach leasing to steel framed cargo trailers.

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Not surprisingly Net Perceptions shareholders, urged by its board, shunned the offer which prompted Obsidian to raise the cash side of its offer to a full quarter.

It now seems as if the plug will finally be pulled on Net Perceptions as 13.8m shares were voted in favor of liquidation late last week. But the majority of outstanding shareholders still resisted the liquidation scheme by not voting.

Net Perceptions was once upon a time a leading provider of software that analyzed Web site visitor interactions to gauge browsing (and buying) habits. The company listed the likes of 3M, eBay, and JC Penney as marquee clients.

This article is based on material originally published by ComputerWire

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