Oddly, Project Velocity has not died of its own accord. Perhaps, though I am not certain on this point, through our dire prediction, that the other interested parties were merely leading Velocity down the primrose path and that when the trap of time sprung, offers would melt under the onslaught of nickel and dime objections until a fraction of the original offer was still on the table. I do not know for certain that this has happened, but I strongly suspect it.
Late last week one of our contacts at Velocity called up and asked after our interest in supporting a management buyout (MBO). This puts us in something of a quandary and our first reaction was to carefully cull the non-disclosure agreement we had inked with Velocity to make sure that our discussing an MBO with a member of the management team was kosher. It seems to be, even according to the grumpiest of our attorneys.
I can only guess at what happened, but I think I am probably close with this scenario:
Lured into the honey trap of diligence with our rivals, hopes were drawn up, but time began to wind down, assisted, no doubt, by the slow pace of progress cultivated by the interested firms.
Annoyed by senior management's blindness (how do you think they lost all their IPO money in the first place) and totally unwilling to do business with the sharks now circling, senior-middle management looks around for white knights and we are the closest approximation.
This is interesting because, depending how valued senior-middle management is to the division, the sharks might be scared off by the potential "People Pill" defense, the mass defection or non-cooperation of critical managers familiar with the product, production and etc. If this is so then an MBO, with us as sponsors, could be the only alternative left to the parent. Although, shut-down is always an option.
The big question now is how badly senior-middle management, and Sub Rosa, have alienated senior management at Velocity. Part of this depends on how much of an "us and them" dynamic exists. Time will tell.
