According to this story, the fly in the ointment for getting the Oracle acquisition of NetSuite completed is a large institutional shareholder, T. Rowe Price. While I know some people at NetSuite we haven’t been talking and I have not been following the situation very closely. But as an outsider looking in, it seems like Price might be trying to apply some M&A techniques from the late 20th century to squeeze a few more bucks out of Oracle. Good luck with that I say.
While it’s normal to want to optimize or even maximize a deal, Price might be on a fool’s errand given the numbers involved. I am not talking about the $9.3 billion price tag for the acquisition. I am referring to the fact that deals like this have piles of analysis that support the price set by the offering party. Sure there’s some grey area and deals have been known to be sweetened but I don’t think this is going to happen this time.
Larry Ellison’s part ownership including friends and relatives is substantial but not a majority. Since Ellison also owns a significant part of the acquiring party he’s got a dual responsibility to ensure he gets a fair price and that he doesn’t over pay. If he fails in either responsibility there will be stern discussions in one boardroom or another.
So at this point I think it is what it is. The offer expires on November 4 and while it may look like a game of chicken between Ellison and Price, I have a feeling that Ellison isn’t losing any sleep.
(Cross-posted @ Beagle Research Group)