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Manugistics Falls After Nixed Takeover Rumor

The company said it will reorganize and cut about 400 employees.

Supply-chain software maker


(MANU) - Get Free Report

disappointed investors after it announced plans that it was restructuring its business Tuesday. Last week, investors pushed the stock higher in anticipation that German enterprise software developer


(SAP) - Get Free Report

was close to buying Manugistics.

Shares of Manugistics were down around 30% today after the company said it will reorganize as an independent software vendor and cut about 400 employees. It also said it is not in discussions with other companies regarding a merger.

Christopher Desautelle, analyst with

Legg Mason Wood Walker

, said that if he had to speculate, Manugistics and SAP could not agree on a price, perhaps because the premium Manugistics sought may have been "too rich." Rumors last

week suggested Manugistics had turned down an offer of $15 per share and that SAP may have had a new offer.

"It looks like they couldn't get a deal done, so they're going to do it alone," said Desautelle, who downgraded Manugistics to market perform from outperform after the announcements.

The restructuring includes hiring a new chief executive. Both Joseph E. Broderick, executive vice president of client sales and services, and Keith Enstice, senior vice president of global consulting services, have resigned.

"It's a situation where they made a move -- they laid off people, and some management has resigned," said Desautelle. "It's a 'go-for-it' strategy."

Shares of Manugistics had rallied to 17 3/8 last week as the takeover talk heated up. It was recently trading 4 11/16 lower at 10 3/4.