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The controversy is over; Oracle has once again been victorious in acquiring a company with a less-than-willing shareholder constituency.
Oracle announced June 21 that Portal Software shareholders had tendered 32 million shares—about 74 percent of the companys outstanding stock, and enough for Oracle to acquire the billing software company for $220 million, or its original asking price of $4.90 a share.
Oracles initial April 12 bid for Portal Software was met with a less-than-energetic response from shareholders, which caused Oracle to extend its tender offer not once but twice in order to gather enough shares to proceed with the acquisition.
By early June only 23.2 million Portal shares had been tendered to Oracle—a little over 50 percent of the companys shares.
A small insurgency of sorts, led by New York-based Berggruen Holdings, which owns 9.1 percent of Portal Software, threatened to stall the deal indefinitely. Joshua Horowitz, director of research at Berggruen, said in letters to Portal Software that the company was being undersold and the deal was structured unfairly to shareholders.
While it isnt clear if other major shareholders were behind Berggruen specifically, the fact is there werent enough shares tendered to secure the deal—until today.
An additional 22 to 24 percent of shareholders have tendered since Oracles last extended offer on June 7.
The Portal Software scuffle is not Oracles first run-in with shareholders. The database and business applications giant battled fiercely—with shareholders, board members, executives and the U.S. Department of Justice—to acquire rival PeopleSoft.
After an 18-month fracas that brought Oracle to court, exposed thousands of its own and rivals e-mails (along with some top-secret deals, like a potential merger between Oracle rivals Microsoft and SAP), and brought down a few executives in both houses (PeopleSofts CEO Craig Conway was fired over the deal), Oracle succeeded in acquiring PeopleSoft in late 2004, for nearly $11 billion.
On a shopping spree since, Oracle also acquired other software companies, including Siebel Systems on Jan. 31 for about $5.85 billion, though in a much gentler deal.
Oracle, of Redwood Shores, Calif., has extended another offering period for Portal Software, this time until Friday, June 30, for the remainder of Portals outstanding shares. Its latest tender offer for Portal expired June 20 at midnight.
In the meanwhile, Oracle said June 21 that Portals management and employees will form a business unit within Oracle, concentrating on developing its billing and revenue management software. Bhaskar Gorti, Portals current senior vice president of worldwide sales, service and marketing, will lead the unit as its general manager.
“The Oracle-Portal combination will deliver the first end-to-end packaged enterprise software suite for the communications and media industry,” Charles Phillips, Oracles co-president, said in a statement. “We supply technology and applications to over 90 percent of communications companies worldwide today, and billing is a logical and complementary addition for those customers.”