Involved in a strategic review since November of last year, supply-chain software maker i2 Technologies Inc. [ITWO] may be inching closer to a resolution once it resolves ongoing litigation against SAP AG [SAP].

In a Wednesday research note, JMP Securities analyst Patrick Walravens says that i2's potential sale "is increasingly dependent on the outcome of the patent lawsuit against SAP," adding that the supply-chain specialist "has the better side of this case," with potential damages if it does win of up to $500 million. That figure would be roughly double i2's $252 million market capitalization.

I2 alleges that the German enterprise software giant infringed seven of its patents related to supply-chain management. A preliminary hearing on the claim is scheduled for April 30 in the U.S. District Court for the Eastern District of Texas.

Walravens also says that i2's strategic review committee may have encountered "some friction" in its efforts to sell the company from one of its largest shareholders, Q Investments LP, which he says prefers a liquidation rather than a sale. Q Investments controls 17.7% of the voting power of the company. I2 said in February that the company's strategic review, which it originally expected to conclude in January, has "generated credible interest" in a range of options and extended the review indefinitely.

Walravens maintains a "market perform" rating on i2, but reduced his price target from $22 to $17 per sahre due to "compression in the valuation of the peer group and the challenging IT spending environment." -- David Shabelman

See March 3 post from Tech Confidential
See Oct. 5 story from Tech Confidential