Dive Brief:
- T. Rowe Price Group says it is 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. The investment firm also said NetSuite should have consulted other potential buyers before settling on a price with Oracle.
- Oracle announced in July that it planned to buy cloud business software company NetSuite and expected the deal to close in July, following regulatory and shareholder approval.
- With 18% shares, T. Rowe is NetSuite’s largest shareholder after Larry Ellison, who own's 40%, according to a Reuters report.
Dive Insight:
With one of the largest shareholders moving to block the deal, it is unlikely that Oracle with be able to buy NetSuite. In the letter, T. Rowe pointed to Workday as its "closest public comparable" because of NetSuite's unique and successful subscription-based ERP software.
NetSuite is among the three leaders in the ERP SaaS category, according to Q2 data released from Synergy Research Group. While Microsoft is the overall SaaS leader, among others, Oracle also has a leading position. Combined with NetSuite, the company could have proved even more dominate with a heavy presence in enterprises across sectors.
But with investors turning against the deal, NetSuite may soon be back on the market. Any number of providers could move to buy NetSuite and grow their market share, which has a notable sales advantage in the cloud business software space.
