Mid-market customer relationship management (CRM) software maker Pivotal's acquisition saga twisted again yesterday, as the company announced that last-minute bidder, CDC Software, has submitted a firm offer that trumps Pivotal's previously agreed-upon plans to be bought by Oak Investment Partners.
CDC, a unit of Hong Kong-based Chinadotcom, is offering Pivotal shareholders a choice of $US2 cash or $US2.14 in cash and Chinadotcom stock in exchange for each share of Pivotal stock. The offer values Pivotal at around $US52 million, and tops the $US1.78 cash per share offered by Oak.
Oak, an investor in Pivotal, agreed in early November to acquire financially-struggling Pivotal and merge it with Talisma, another Oak-based developer of sales, marketing and customer service software.
Days before a scheduled Pivotal shareholders' vote on that deal, Pivotal rival, Onyx Software, stepped forward with an unsolicited bid to acquire Pivotal.
Pivotal's board of directors recommended rejection of that all-stock deal, but as the company fielded Onyx's offer, CDC submitted its own unsolicited bid, after failing to make an offer when approached earlier in Pivotal's process of soliciting potential buyers.
Pivotal's board initially rejected CDC's bid, citing significant risks that the contingency-laden offer would not result in a sale.
CDC responded by offering to speed up its due diligence process, and Pivotal agreed to spend last week negotiating with CDC.
Although Pivotal has determined that the proposed CDC buyout is a superior deal to Pivotal's previous arrangement with Oak, the company is constrained by its Oak agreement from accepting CDC's offer.
Oak has until Thursday to amend its offer.
To handle the recent developments, Pivotal plans to postpone for the third time its shareholder vote on the Oak/Talisma offer. The company now hopes to hold its shareholder meeting next Monday in its hometown of Vancouver.
If CDC is successful in acquiring Pivotal, the company plans to use Pivotal's CRM technology in the mid-market ERP (enterprise resource planning) suite it is building by acquiring component applications.
CDC focuses on selling business applications to customers in the Asia-Pacific region, particularly in the manufacturing industry.