Oracle’s $9.3 billion offer for NetSuite opposed by T. Rowe Price

Citing “inherent conflicts of interest,” NetSuite’s second-largest shareholder says it won’t be voting for Oracle’s proposed $9.3 billion purchase of the cloud pioneer.

Oracle announced the deal — its latest push into the cloud — in July. It’s offering $109 a share in cash, a 19 percent premium to NetSuite shares at the time.

But investment firm T. Rowe Price said the offer undervalues San Mateo-based NetSuite, and added that it thinks the business-management software maker would be better off staying independent.

“The reasons we’ve concluded that NetSuite is a highly differentiated company are rooted in the large market opportunity in front of it, the difficulty competitors would have in replicating its architecture, and its strategic value,” T. Rowe Price said in a letter to NetSuite’s board that was included in a company filing Tuesday.

T. Rowe Price said in the filing that it owns about 14.5 million shares, or 18 percent, of NetSuite, calling itself the company’s “largest unaffiliated shareholders.”

However, Oracle Chairman Larry Ellison, who was an early investor in NetSuite, owns about 40 percent of it.

T. Rowe Price suggested that no other buyers have come forward because of this.

“There are numerous reasons why potential bidders (and their investment bankers) would choose to pass on this deal because the probable outcome is obvious to anyone who understands Mr. Ellison’s unique relationship with the company,” the investment firm said.

Oracle has not yet responded to SiliconBeat’s request for comment.

Shares of Oracle and NetSuite are both up slightly today.

 

Photo: The Oracle campus in Redwood City, Calif., on Sept. 2, 2015. (Karl Mondon/Bay Area News Group)

 

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