The Street's Reaction To Oracle's Final Tender Offer Date Shows Concern With Deal

There is every reason for Oracle Corporation ORCL to express its unhappiness on the status of the tender offer as part of its plan to acquire NetSuite Inc N for $109 a share. The poor response to its tender offer has not only forced the company to extend the tender offer but also issue a warning that the company is not averse to terminating the planned acquisition.

While investors of Oracle were not worried about it, NetSuite stock suffered the most on Friday following the uncertainty over the completion of the transaction.

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As of October 5, NetSuite had outstanding shares of about 81.47 million shares. According to the merger terms, majority of the unaffiliated shares or about 20.403 million shares out of 40.81 million shares should have been surrendered for the transaction to go through.

However, Napa Acquisition Corporation, which is a subsidiary of Oracle's OC Acquisition LLC, indicated that only 4.57 million shares were surrendered. This represents only 11.2 percent of the unaffiliated shares.

Deadline Pushed Back

Following this, Oracle extended the tender offer deadline from October 6 to November 6. In a press statement, the company said, "In the event that a majority of NetSuite's unaffiliated shareholders do not tender sufficient shares to reach the minimum tender condition, Oracle will respect the will of NetSuite's unaffiliated shareholders and terminate its proposed acquisition."

The company's indication and the poor response raised concerns on the potential cancellation of the merger deal.

At last check, NetSuite was down 3.45 percent at $105.52. Oracle was up 0.14 percent at $38.78.

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