Oracle expects to close its $9.3 billion acquisition of cloud application developer NetSuite Monday after a majority of unaffiliated NetSuite shares were tendered as of midnight Friday, Oracle's deadline for its $109-per-share offer.
Redwood City, Calif.-based Oracle Saturday issued a statement saying that as of midnight Friday 21,775,553 unaffiliated shares, or 53.21 percent of the total unaffiliated shares, had been tendered. Altogether, 62,330,605 shares, or 76.39 percent, of the total shares issued and outstanding had been tendered, including shares held by Oracle CTO Larry Ellison, his family members and other related entities.
Oracle and NetSuite disclosed the acquisition deal in July under which Oracle would obtain NetSuite's cloud-based ERP, CRM and ecommerce applications. While Oracle lists many Fortune 500 corporations among its customers, the fast-growing NetSuite has been particularly successful in selling its application services to small and midsize businesses.
Oracle Co-CEO Mark Hurd said at the time the deal was announced that Oracle and NetSuite's cloud applications would "co-exist in the marketplace forever," suggesting that Oracle would continue to offer NetSuite's applications independently of Oracle's cloud software portfolio.
Because Ellison and his family members own around 45 percent of NetSuite's stock, many in the industry had expected that Oracle might one day move to acquire NetSuite.
But Ellison's stake in NetSuite became an issue in September when T. Rowe Price Associates, one of NetSuite's largest shareholders with 12.2 million shares, sent NetSuite's board of directors a letter arguing that Oracle's $109-per-share offer was too low. The letter suggested that Ellison's stake in the company had prevented other potential buyers from coming forward.
T. Rowe Price said it would support an acquisition price of $133 per share, adding about $2 billion to the total acquisition price. But Hurd recently said the $109-per-share offer was Oracle's last and best offer and the giant software company would walk away from the deal if a majority of shares weren't tendered by Nov. 4.
It was not clear whether Oracle's final tally of tendered shares included T. Rowe Price's holdings. T. Rowe Price did not respond to an inquiry by press time.
The standoff threatened to derail the deal and created uncertainty for NetSuite, based in San Mateo, Calif., and for its channel partners. With the acquisition in limbo, partners said closing deals for NetSuite application services had become more difficult.
"I've talked to a couple of different partners so far. This has become almost a crisis. It feels like everything has stopped cold," Brenda Brinkley, founder and CEO of Houston-based Epiphany, a NetSuite partner, told CRN. "It's usually hot and heavy at this time of year, but right now it's cold."