Law Firms to Probe MICROS-Oracle Acquisition Deal - Analyst Blog

Since the news of the proposed acquisition of MICROS Systems MCRS by Oracle ORCL hit the market, a number of law firms have initiated investigations for any breach of fiduciary duty and violation of state rules and regulations. The primary target has been the board of directors at MICROS.

The law firms, on behalf of MICROS shareholders, are investigating whether the MICROS board has sufficiently discharged its duties related to the sale and verifying Oracle's valuation of $68 per share ($5.3 billion) for MICROS.

MICROS' share price has been on an upswing after rumors about the proposed deal spread on Jun 17. Following the news, MICROS surged 14.9% ($8.62) to $66.33. Shares of MICROS closed $67.90 on Tuesday, a tad below the proposed acquisition price of $68.00.

MICROS manufactures and sells point-of-sale (POS) hardware, software and services to restaurant, hotel, hospitality, specialty retail markets and other similar markets. Expansion of the company's SaaS capabilities and an increase in licensed software sales remain the growth catalysts, going forward. Moreover, recent collaborations with companies like Microsoft MSFT, Dell and Intel INTC are expected to boost MICROS' hardware business.

It is worth noting that MICROS reported better-than-expected third-quarter fiscal 2014 results buoyed by higher adoption of its systems and new customer additions. The company also provided an encouraging fiscal 2014 guidance.

MICROS' diverse offerings and expanding client base has prompted Oracle to acquire the company. Adding MICROS to its portfolio will extend its offerings in the retail and hospitality industries and strengthen its position in these markets.

Nonetheless, MICROS faces competition from the likes of Square, Revel, Groupon Inc and NCR Corp., which provide mobile and tablet-based offerings for the hospitality sector that cannibalize MICROS' legacy POS workstations. Impending investigations are an additional overhang on the deal.

Currently, MICROS has a Zacks Rank #3 (Hold).