June 01, 2006, 5:17 PM — Oracle Corp.'s bid to acquire billing and revenue management software vendor Portal Software Inc. is still not a done deal. To encourage its shareholders to accept Oracle's offer, Portal issued a slide presentation Wednesday laying out more details of why the company's board decided to sell to the database and applications vendor.
Oracle publicly announced its intention to purchase Portal for US$4.90 per share on April 12, valuing the company at around $220 million. At that point, Portal's board of directors had already unanimously approved the deal. Oracle had hoped to complete its tender bid May 22. With insufficient shareholders responding, Oracle had to renew the bid with that offer now set to expire at 12:00 a.m. EDT Tuesday.
Portal will not have a count of the shares tendered until midnight Tuesday, according to a company spokeswoman. She declined to comment on what might happen should insufficient shares be tendered.
Oracle has positioned Portal as an important purchase to beef up its penetration into the communications and media industry. Oracle has already announced plans to integrate Portal's billing and revenue management software with its ERP (enterprise resource planning) applications and the CRM (customer relationship management) applications.
Portal's management has maintained that the company is in financial difficulty. The vendor was delisted from Nasdaq last year and remains delinquent in financial filings to the U.S. Securities and Exchange Commission (SEC). In a webcast to Portal customers last month, Oracle President Charles Phillips said: "The biggest competitor Portal faced was simply viability questions."
In the slide presentation, which is on the SEC's Web site, Portal lists as factors in its decision to go with Oracle its financial woes as well as the larger size and profitability of its competitors like Amdocs and Comverse. The company also detailed how it went about the sales process. Starting in October 2005, Portal contacted 18 potential buyers. By February, six firms indicated their interest in acquiring the vendor, valuing Portal at between $4.20 to $5.00 per share. Three companies submitted final bids in the range of $5.00 to $5.05 per share The Portal board accepted Oracle's offer as requiring less negotiation and most certain to close than the other bids.
Portal's second largest shareholder Berggruen Holdings North America Ltd. has publicly voiced its disapproval of the pending purchase by Oracle.
In a letter dated May 24 to Portal President and Chief Executive Officer David Labuda, Joshua S. Horowitz, director of research at Berggruen, wrote that less than 25 percent of Portal's public shareholders, excluding the company's board members and management, had tendered their shares to Oracle.
"It should now be crystal clear that Berggruen Holdings, owner of a 9.1 percent interest in the company, is not alone in our dissatisfaction with both the price and the structure of the transaction you have recommended," he wrote. Horowitz called upon the Portal board to "rethink the Oracle transaction" and conduct "a fair and open sales process" where would-be buyers would have time and access to audited financial statements.
