NEW YORK Jan 6 Comverse Technology Inc, a software developer for years tangled up in an options backdating scandal, plans to sell about 8 percent of its majority stake in analytics and security software firm Verint Systems Inc (VRNT.O).
In a filing with U.S. securities regulators on Thursday, Verint said that Comverse CMVT.PK, which owns 61.3 percent of its common stock, hopes to raise up to $72.2 million in the public offering. The offered 2 million shares represent more than 5 percent of Verint's outstanding common stock.
Because of accounting issues and the stock options backdating scandal, Comverse was delisted from the Nasdaq stock exchange in 2007 and has been unable to file with the U.S. Securities and Exchange Commission.
Beginning last year, the firm began seeking ways to raise capital, but hasn't elicited bids high enough to spur a successful auction.
The majority stake in Verint, which remains Comverse's most prized possession, attracted interest from private equity firms during that time, sources told Reuters in November.
In December 2009, Comverse settled the second-largest class action lawsuit related to stock options backdating for $225 million, while the company's ex-CEO Jacob "Kobi" Alexander fled to Namibia.
Backdating is the practice of locking in revenue by retroactively pricing option grants at times when a company's stock price was low, effectively increasing the value of options. If properly accounted for, the practice is legal.
After a mid-year surge on sale expectations, Verint's shares have leveled off in the past few months, trading at $32.26 in mid-morning on Nasdaq, up 1.3 percent.
Comverse shares, now trading on the pink sheets, was up 0.14 percent at $7.30. (Reporting by Alina Selyukh, editing by Dave Zimmerman)