Pivotal Board OKs CDC's Offer

"We spent the weekend negotiating the structure of the transaction with CDC to make sure that 'what you see is what you get,' " said Larry Dennedy, executive vice president of investor relations consulting firm MacKenzie Partners, which is exploring all of the suitors' inquiries on Pivotal's behalf. "The special committee of the board, with the recommendation of Pivotal's bankers, decided that the CDC offer is a superior transaction." In other words, said Dennedy, the CDC proposal "is worth more money to shareholders."

CDC is offering Pivotal shareholders either $2 per share in cash, or $1 in cash plus $1.14 worth of Chinadotcom shares. Previously, Pivotal had agreed to be acquired by venture capital firm Oak Investment Partners for $1.78 a share. Oak Investment Partners planned to then merge Pivotal's operations with those of its portfolio company, Talisma, which provides software to help serve customers online.

Pivotal's board declined a third offer from CRM competitor Onyx, tendered Nov. 23, for a stock and cash transaction valued at $2.25 a share. Pivotal's reasons for that rejection, cited in a November 14 press release, included the "volatility and relative illiquidity of Onyx stock."

"It's not known yet how this will affect us." said Barry Berlin, president of Client Interaction, a Newton, Mass., solution provider. "My folks who have sold Pivotal really believed in the company. My clients were not happy when they found that Onyx [Software] was a potential bidder because they were afraid Onyx would buy the company just for its client list."

On Wednesday, Onyx Software announced that it has withdrawn its bid to acquire Pivotal, and said it will offer Pivotal customers a one-to-one trade of the latest version of Onyx software for each license of Pivotal software.

Oak Investment Partners has until Dec. 4 to counter CDC's offer. Pivotal shareholders will meet Dec. 8 to vote on the offer. If accepted, this would be the third acquisition for Chinadotcom in as many months. Now focusing on the manufacturing sector, the company has acquired supply chain software company Industri Matematik International, enterprise software supplier Ross Systems and the financial performance software business of CIP-Global.