Dive Brief:
- Oracle announced Friday it will extend the expiration date for NetSuite shareholders to approve its offer to buy the company until November 4, according to a company announcement.
- Oracle also said it will respect the choice of the shareholders if they don’t endorse the agreement and will walk away. The company said it currently has only 22% of the stock needed to close the deal.
- NetSuite stock dropped almost 5% following the announcement to extend the tender deadline. The decline was the first time NetSuite’s had fallen below the offer price of $109 since the deal was announced.
Dive Insight:
NetSuite might soon be back on the market. Oracle announced in July that it planned to buy NetSuite and expected to quickly close the deal, following regulatory and shareholder approval.
But last month, T. Rowe Price Group said it was opposed to Oracle’s planned acquisition of NetSuite because the $9.3 billion price is too low and there are "inherent conflicts of interest" between the two companies, according to media reports and a letter sent to NetSuite's board disclosed in U.S. SEC filings.
T. Rowe Price Group said NetSuite should have consulted other potential buyers before settling on a price with Oracle. In response, Oracle could still raise the price tag. The deal is unusual because Larry Ellison, chairman of Oracle, has a 40% minority stake in NetSuite. T. Rowe is NetSuite’s second largest shareholder after Ellison.
A majority of "unaffiliated" shares must vote in favor of the acquisition for it to go through.
Experts say buying NetSuite will help Oracle compete against Salesforce, Microsoft and SAP. NetSuite is a leader in the ERP SaaS category, according to Q2 data released from Synergy Research Group, so it’s an appealing target for an acquisition.
