Openwave: Harbinger Capital accuses company of misleading stockholders about buyback

By Lisa Kerner

Charlotte, N.C., Feb. 1 - Harbinger Capital Partners accused Openwave Systems Inc. of misleading its shareholders during a proxy contest regarding the company's stock repurchase plan, according to an open letter to the company from Howard Kagan, managing director at Harbinger.

On Jan. 30, Openwave Systems announced it planned to repurchase up to $100 million of the company's common stock by the end of its fourth fiscal quarter of 2007, or June 2007. Previously the company said the buyback would be completed in February or March of 2007, according to Harbinger Capital Partners.

Kagan said, "In its rush to adopt a 'me too' buyback strategy to blunt the Harbinger proxy initiative and help the company nominees retain their board seats, Openwave's management and board once again failed in their fiduciary duty: this time they either failed to explore how long it would take to execute their 'me too' buyback before providing guidance to stockholders, or they knew it could not be accomplished by February and made misleading statements to the contrary."

While pleased with the company's share repurchase program, Kagan is disappointed by the small size and slow timing. Other buyback strategies the company did not pursue included a Dutch auction tender.

In closing, Kagan said, "It is abundantly clear that stockholders cannot rely on any public statements by Openwave Systems management or its board."

Harbinger, with a 10% stake in Openwave Systems, in a previous Securities and Exchange Commission filing, accused the company's board of being out of touch with its stockholders.

Based in Redwood City, Calif., Openwave Systems provides software products and services to the communications and media industries,

Harbinger is a Birmingham, Ala.-based Investment group.

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