On January 3, 2009 in San Jose, Selectica, Inc., Nasdaq:SLTC, announced that a committee of the Board of Directors ordered the exchange of each outstanding rights under its Rights Agreement, as in effect as of the close of business on January 2, 2009, for one share of the Company’s common stock.

The internal group of bidders for a company Selectica triggered a poison pill clause by initiating a takeover.  Selectica refused to withdraw the poison pill and the target bidders filed suit in the Chancery Court of Delaware to declare the poison pill invalid.  The pill, a shareholder rights plan that dilutes the acquirer by exchanging one right for one share of target stock not held by the acquiring group.  The first of the two extraordinary features was that it had a 4.99 percent trigger rate, which is very low and second it gave the Selectica board ten days after the triggering purchase to withdraw or act on the pill's dilution.

This takeover appears to be by way of proxy fight.  In a proxy fight, the serving directors and management have the odds stacked in their favor over those trying to force the corporate change.   Strategies are used by these incumbents to stay in charge w ith some methods being more successful than others with proxy fights waged by hedge funds being successful more than 60% of the time.

Selectica makes no statements, but takes refuge within the “Safe Harbor” Statement under the Private Securities Litigation Reform Act of 1995  “Such information includes, without limitation, business outlook, assessment of market conditions, anticipated financial and operating results, strategies, future plans, contingencies and contemplated transactions of the Company. Such forward-looking statements are not guarantees of future performance and are subject to known and unknown risks, uncertainties and other factors which may cause or contribute to actual results of Company operations, or the performance or achievements of the Company or industry results, to differ materially from those expressed, or implied by the forward-looking statements.”