Pivotal Rejects Onyx Bid, Weighs Another Offer - InformationWeek

InformationWeek is part of the Informa Tech Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them.Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.

IoT
IoT
Software // Enterprise Applications
News
11/17/2003
01:37 PM
50%
50%

Pivotal Rejects Onyx Bid, Weighs Another Offer

The CRM vendor's board has rescheduled a planned shareholders meeting to evaluate the unsolicited bid.

Pivotal Corp. has rejected a proposed stock-for-stock acquisition of the company by Onyx Software Corp., but on Monday the Pivotal board said it would seek to delay a previously scheduled shareholder meeting while it evaluates another unsolicited acquisition bid it has received.

A Pivotal shareholder meeting had been scheduled for Tuesday to consider a previously announced agreement to be acquired by Talisma Corp., in a cash transaction financed by Oak Investment Partners that's valued at $1.78 per share. The shareholders meeting has been tentatively rescheduled for Friday.

In a statement released Monday, Pivotal said it has received an additional acquisition bid from an undisclosed party. Details of the bid have not been disclosed.

Last week, Onyx made an unsolicited bid to acquire the rival midmarket customer-relationship-management software vendor in a stock deal it says is valued at $2.25 per share of Pivotal stock, a 26% premium over the Talisma bid. Onyx has offered 0.475 shares of Onyx stock for each share of Pivotal stock, which a spokesperson for Pivotal said Monday is about $2 per share.

Since receiving the Onyx proposal, the Pivotal special committee has met three times with financial and legal advisers and once with the board of directors, the company said Friday. Pivotal then issued a statement that the Onyx transaction would not be in the best interests of Pivotal shareholders and would not result in a "superior transaction" to the proposed Talisma bid.

Factors not favoring the Onyx bid cited by the special committee include "the volatility and relative liquidity of Onyx stock--[which] has underperformed both the Nasdaq and Pivotal share price over the last 12 months."

The special committee also noted an "apparent absence of [Onyx] experience in completing larger transactions and the integration issues associated," and the fact that Onyx isn't profitable. It also noted that Pivotal would be required to pay a $1.5 million break fee to Oak Investment Partners if the previous deal is scrapped.

Onyx issued a statement Monday reiterating that its proposal remains on the table and said that if the deal is completed, it would provide Pivotal shareholders with equity participation in what would be the second-largest pure-play CRM vendor.

Both Onyx and Pivotal offer CRM software, primarily to midmarket companies, and both have annual revenue of about $60 million. Both companies have reported net losses in their most recent financial reports.

We welcome your comments on this topic on our social media channels, or [contact us directly] with questions about the site.
Comment  | 
Print  | 
More Insights
Slideshows
What Digital Transformation Is (And Isn't)
Cynthia Harvey, Freelance Journalist, InformationWeek,  12/4/2019
Commentary
Watch Out for New Barriers to Faster Software Development
Lisa Morgan, Freelance Writer,  12/3/2019
Commentary
If DevOps Is So Awesome, Why Is Your Initiative Failing?
Guest Commentary, Guest Commentary,  12/2/2019
White Papers
Register for InformationWeek Newsletters
Video
Current Issue
The Cloud Gets Ready for the 20's
This IT Trend Report explores how cloud computing is being shaped for the next phase in its maturation. It will help enterprise IT decision makers and business leaders understand some of the key trends reflected emerging cloud concepts and technologies, and in enterprise cloud usage patterns. Get it today!
Slideshows
Flash Poll