Updated from 3:44 p.m. EDT
tumbled Tuesday after the company confirmed it will acquire
in a stock-for-stock exchange.
The two companies had reported, then retracted, a similar
statement on Monday, admitting "significant issues" remained to be resolved before the companies would agree to a merger.
At a joint press conference Tuesday afternoon, company officials announced the Pleasanton, California-based Commerce One would issue 0.8 share for each outstanding share of AppNet at an estimated value of $1.4 billion, or 28 million shares. Earlier reports estimated the deal to be valued at $1.38 billion.
Shares of Commerce One dropped sharply after the announcement, while shares of Bethesda, Md.-based AppNet barely budged. Commerce One shares closed down 43, 8 7/16, or 16%, at 43. AppNet shares closed down 13/16, or 3%, at 33 5/16.
"AppNet is excited to be joining with the leader in e-commerce to deliver comprehensive solutions to the marketplace," said Ken Bajaj, chairman and chief executive officer of AppNet, in a statement issued after the acquisition announcement.
"Commerce One has over 100 trading exchange customers who are demanding implementation and consulting services to execute rapidly on their business models. With the acquisition of AppNet, we are ideally positioned ¿ to deliver on these capabilities," added Mark Hoffman, Commerce One chairman and chief executive officer.
AppNet's stockholders must approve the agreement. If it is, the joint company will include 44 offices in 18 countries, employing more than 2,300 workers.
AppNet provides consulting, marketing and e-business application development services to facilitate communication and commerce between businesses and their trading partners and consumers. Commerce One links buyers and suppliers in real-time trading communities over the Internet.