$12.37-a-Share Offer Is Coming From New York Firm for ISSCO

San Diego County Business Editor

A New York-based computer software maker said Monday it will make a $12.37-per-share tender offer for San Diego-based Integrated Software Systems Corp. (ISSCO) in a deal worth about $68.4 million.

An offer by a subsidiary of Computer Associates International will be made no later than Friday, according to an agreement reached with ISSCO.

If the deal is consummated, ISSCO will become a subsidiary of Computer Associates and probably will drop its name, company officials said.

The tender offer--to be made under the name of GTO Merge Inc., a Computer Associates subsidiary--is contingent on the holders of at least 91.6% of ISSCO's 5.53 million shares approving the purchase.

Computer Associates already has 40% of those shares secured under an agreement with some of ISSCO's key officers and directors.

Not surprisingly, ISSCO's board has unanimously approved the tender offer and is recommending that shareholders accept the proposal.

The per-share offer price is well below ISSCO's initial public offering of $16 per share in March, 1983, and significantly below its March, 1985, public offering that raised $6.5 million at $22.75 per share.

ISSCO closed Monday at 11 3/4, bid, up from 9 on Friday. Its all-time low of 7 5/8 was reached earlier this year.

Peter Preuss, founder, chairman and chief executive, owns 32% of ISSCO's stock. If the tender offer is completed, Preuss will resign his posts, an ISSCO spokesman said.

Neither Computer Associates Chairman Charles Wong nor his brother, company President Anthony Wong, could be reached for comment Monday.

Computer Associates was founded 10 years ago and is a leading marketer of computer software products. Last year, it reported $18.5 million in earnings and $191 million in revenue. The company has 1,800 employees worldwide.

ISSCO, founded in 1970, develops and markets graphics software. Earnings were off this year, in part because about 20% of its business is oil-related, according to stock analyst Irving Katz of San Diego Securities.

For the nine months ended Sept. 30, ISSCO's earnings were $1.1 million, down 54%, while revenues were virtually flat at $27.8 million.

Nonetheless, there is a "fit" between ISSCO and Computer Associates, said Katz, because the sales staff at both companies can sell the other's products "without duplication.

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