UPDATE 1-Openwave Systems board rejects Harbinger offer

(Recasts, adds details throughout, previous BANGALORE)

SAN FRANCISCO, June 4 (Reuters) - Openwave Systems Inc. (OPWV.O) said on Monday its board rejected an unsolicited partial tender offer from Harbinger Capital Partners to acquire control of the wireless communications software provider and the company's shares fell nearly 14 percent after hours.

Openwave, which also declared a special $100 million cash dividend, said the offer was inadequate and not in the best interests of the company and its stockholders.

Last month, the investor group that owns 13 percent of the company's shares offered to boost its stake by buying another 49 percent of outstanding shares for about $335 million, or $8.30 per share.

But Openwave said its board unanimously rejected the unsolicited partial tender offer as inadequate because it did not provide fair value. The company said its financial adviser, Merrill Lynch, also said the offer was inadequate.

Openwave hired Merrill Lynch in March to help it explore strategic alternatives and a possible sale, but said on Monday that, despite expressions of interest, no party emerged with a binding proposal to acquire the company.

Harbinger has been pushing the company to focus on developing new products and phasing out underperforming items, cut operating expenses and buy back shares.

Instead, the company believes a stand-alone plan that includes expected annual savings of $50 million through a 20 percent reduction in the work force would generate greater value for stockholders.

The plan also includes as a one-time special cash dividend of $100 million, or $1.20 per share, and the company said there may be more opportunities to return value to shareholders after the potential sale of non-core assets.

Openwave shares fell nearly to $8.97 in extended trading from a Nasdaq close of $10.37. The shares gained about 2 percent, or 18 cents, in regular trading.

(Additional reporting by Supantha Mukherjee in Bangalore)