Oracle Signals Warning On NetSuite Acquisition Offer | Stock News & Stock Market Analysis

Oracle (ORCL) announced Friday that it’s extended the expiration of its tender offer for the acquisition of NetSuite (N), for the final time, to Nov. 4, sending NetSuite shares falling.

“This will be the final extension that Oracle is obligated to make under the merger agreement,” Oracle said in a statement.

In July, Oracle announced an agreement to acquire NetSuite for $109 per share in cash, in a deal valued at $9.3 billion, continuing a wave of tech and software acquisitions.

If a majority of NetSuite’s unaffiliated shareholders do not tender sufficient shares to reach the minimum tender condition, “Oracle will respect the will of NetSuite’s unaffiliated shareholders and terminate its proposed acquisition,” it said.

Unaffiliated refers to a condition that the deal get majority approval from shareholders other than NetSuite’s biggest shareholder, Larry Ellison, co-founder and executive chairman of Oracle, or anyone affiliated with Ellison or his family, or any of NetSuite’s executive officers or directors.

On Sept. 9, Oracle announced the extension of its tender offer to Oct. 6, from Sept. 15.

NetSuite offers cloud-based customer relationship management and enterprise resource planning software. Longtime database leader and business software powerhouse Oracle has been transitioning more of its business to the cloud, and more enterprises move more of their operations to the cloud.

NetSuite stock sank 3.8% to 105.19 in the stock market today. Netsuite shares, which had barely budged since the July deal announcement, fell below its 50-day line.

Oracle stock fell a penny, to 38.71.

IBD’S TAKE: Oracle is transitioning to an on-demand, cloud-based software model. The combination of their cloud applications are complementary and will accelerate Oracle’s move toward targeting medium-sized companies. Oracle, though, has some poor ratings, as you can learn at IBD Stock Checkup.

Per the terms of the merger agreement, Oracle said, a majority of the unaffiliated shares, or 20.4 million total, must be tendered in order for the minimum condition to be satisfied and the tender offer to be completed. In aggregate, there are approximately 81.47 million shares issued and outstanding.

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