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Does Latest Letter, Filing Spell The End For NetSuite-Oracle Deal?

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Does Latest Letter, Filing Spell The End For NetSuite-Oracle Deal?

For quite some time, there has been a fear of Oracle Corporation (NYSE: ORCL)'s agreement to buy NetSuite Inc (NYSE: N) falling apart. The threat has gained steam with the T. Rowe Price expressing displeasure with the price and now demanding a higher price.

In a filing, Oracle indicated the receipt of T. Rowe Price Associates letter supporting its acquisition provided the company offers $133.00 a share for NetSuite. However, the company reiterated its current price of $109 a share in cash. The current tender offer ends on November 4.

In case the company fails to get a majority of shareholders tendering sufficient shares to reach the tender condition, Oracle might terminate its planned acquisition.

In July, Oracle offered a price of $109 a share to NetSuite for a total consideration of about $9.3 billion. Accordingly, the company started a tender offer later and extended it at least twice one in September and another in October.

While the first deadline expired on September 8, the second one ended on October 7. On the same day, Oracle indicated that it extended the tender offer deadline to November 7 and that the offer price was final.

In the earlier press statement, Oracle indicated that approximately 4.57 million shares were tendered as of October 5 representing 11.2 percent of the unaffiliated shares. NetSuite has outstanding shares of approximately 81.47 million and for the deal to come through; Oracle should get 20.403 million shares through the tender offer.

Following the doubts about the deal coming through, NetSuite shares have been on the losing streak in the current month. At the end of September, the stock closed at $109.84. Once the company indicated poor response to the tender offer, the stock has been witnessing a slide since October 7. The stock lost about 16 percent in October.

At last check, NetSuite shares dropped 2.89 percent to $91.63 while Oracle Shares traded up by 0.54 percent to $38.43.

 

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