Ashton-Tate is ripe for takeover, analysts say, but CEO Ed Esber laughs at the idea.

Ashton-Tate is ripe for takeover, analysts say, but CEO Ed Esber laughs at the idea

Ashton-Tate Corp. of Torrance is very ripe for a takeover, analysts said last week after the computer software company reported its fourth consecutive quarterly loss and no news of a long-awaited new software product.

"I think it's an attractive takeover," said Aharon Orlansky, an analyst with New York & Foreign Securities. "They have a huge customer base, they need fresh management and someone who can take over and capitalize on their success."

Although Ashton-Tate reported a loss of $1 million, or 4 cents a share, on sluggish revenues of $57 million, the company has its balance sheet in position, said analyst Tim R. McCollum of Dean Witter Reynolds, pointing out its $100 million cash balance at March 31.

Ashton-Tate holds about 50 percent of the market share in its flagship dBASE products for list management on personal computers, said McCollum. The company's profitability rests on whether a new version of that product, dBASE IV, Version 1.1 is released successfully and soon before another company grabs its customers with a better upgrade.

Originally dBASE IV was released in late 1988, but users found it cumbersome and full of errors. In the summer of 1989, the company began to lose money, finishing the year with a $29 million loss on lowered revenues of $265 million. An extensive testing program began for Version 1.1, but the new software may not be released until June, analysts have said.

Any number of companies with a lot of cash that could produce economies of scale with Ashton-Tate technology may have their eyes on the company, said Orlansky. Senior management will probably resist most offers, he added, since "they're not exactly underpaid." Chairman and CEO Edward Esber, said Orlansky "has a fantastic deal over there that he doesn't have anywhere else. He doesn't deserve that compensation level."

Esber, a Harvard M B A who was brought on board six years ago, made more than $700,000 cash compensation in 1988, and he exercised options for 537,000 shares of stock. In 1989, however, his cash compensation was listed as $485,000, plus stock options he did not exercise, and the current market value of his stock based on last week's $11.875 a share range is about $4.78 million. Two Ashton-Tate vice presidents also made $190,000 and $250,000 in cash last year in addition to other perks, according to the proxy statement.

Esber laughs at takeover speculation.

"The [Securities and Exchange Commission] rules are very clear on disclosure, and the fact is, there's been no disclosure," he said. "There's been these rumors for one-and-a-half, two years now. We're running this company independently and we're comfortable with what we're doing."

Esber, who as CEO said he takes responsibility for the company, discounted as "typical negative journalism" a front-page Wall Street Journal article this month that lambasted his performance at Ashton-Tate.

He admitted, however, that the company needs to come up soon with dBASE, Version 1.1.

In the meantime, "I think it's good management of the balance sheet [to have a lot of cash], he said. "There are companies throughout our industry that have a lot of cash. That's important in a volatile industry."