It’s a pity that the warring parties in Bosnia can’t see where their best interests lie and come to an agreement like the one that settled all the litigation between Stac Electronics Inc and Microsoft Corp: some may have decided that our unconditional surrender headline yesterday went over the top, but while Microsoft pays to get an irritation off its back, Stac – only a $10m-a-year company, remember – gets a guaranteed $82.9m cash infusion in place of the net $106.4m that it might have got one day, after all Microsoft’s appeals had been exhausted, which after taxes would have cut the net sum to $64m; Microsoft will not get Stac board representation even though its preferred stock will account for 15.5% of Stac’s shares outstanding once converted; Stac plans to spend some of Microsoft’s cash in acquisitions, and insists that the settlement definitely does presage the acquisition of Stac by Microsoft; Microsoft expects to record a gain of about $0.03 per share in the fourth quarter to reverse some of the $120m or $0.26 per share charge it took in the third quarter to cover its potential Stac liability.
