Oracle-NetSuite drama: Investor asks for higher bid but Oracle won’t budge

Oracle is refusing to budge after one of NetSuite’s biggest investors asked it to raise its multibillion-dollar acquisition offer for the San Mateo-based cloud pioneer.

T. Rowe Price, the institutional investor that opposes the deal because it says it undervalues NetSuite, on Thursday sent a letter asking Oracle to raise its bid to from $109 a share to $133 a share. Oracle said in a filing that $9.3 billion is its “best and final offer.”

That reiterates what co-CEO Mark Hurd said on TV this week, and what the Redwood City tech giant said earlier this month when it extended the deadline for shareholder approval of the deal to Nov. 4 (for a second time) but said it was prepared to walk away if that doesn’t happen. Oracle first announced the deal, which would be among its biggest acquisitions, in July.

In September, T. Rowe Price announced its opposition to Oracle’s bid, saying that for that price, NetSuite would be better off staying an independent company. The investor, whose stake in NetSuite is second only to that of Oracle Chairman Larry Ellison, also said Ellison’s “unique relationship” with NetSuite was essentially scaring other would-be buyers away. Ellison, an early investor in NetSuite, has about a 40 percent stake in it.

Oracle wants to buy NetSuite, which makes cloud software for businesses, as it steps up its competition with Salesforce, Workday, Amazon and Microsoft.

In its latest letter, T. Rowe Price said “we view the company as a unique asset, and we have doubts as to whether a comprehensive assessment was undertaken before the NetSuite board accepted the Oracle offer of $109 per share.”

Oracle said in its filing that it “will respect the will of NetSuite’s unaffiliated stockholders and terminate” the proposed deal if its offer isn’t accepted by midnight Nov. 4.

Shares of NetSuite are down o.2 percent to $94.16.

 

Photo: An aerial view of the Oracle campus in Redwood City in September 2015. (Karl Mondon/Bay Area News Group)

 

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