The pending acquisition of mid-market customer relationship management (CRM) software vendor, Pivotal, is turning into a game of musical chairs.
The company's board has rejected rival Onyx Software's unsolicited acquisition bid in favour of sticking with a previously announced plan for a private investment firm to take over Pivotal and merge it with Talisma.
Yesterday, the company said it would delay for several days a shareholder vote on the Talisma deal to give Pivotal's board time to consider an "unsolicited highly conditional" proposal presented to Pivotal by an unnamed party.
The new proposal was a preliminary one, and might not develop into a formal offer, Pivotal said. Representatives from Pivotal could not immediately be reached for comment.
On Friday, Pivotal hopes to hold a vote previously scheduled to take place today [Tuesday] at a shareholder meeting in Vancouver, Pivotal's hometown.
Pivotal said that, at today's meeting, it would seek at an adjournment until Friday afternoon.
It agreed in early October to an all-cash buyout by Oak Investment Partners, which plans to merge Pivotal with Talisma, another software maker in Oak's investment portfolio.
Onyx, a close competitor to Pivotal, offered last week to acquire the company in a stock swap deal. Onyx offered 0.475 Onyx shares per Pivotal share, a trade valued at the time of the announcement at $US2.25 per Pivotal share, topping Oak's $US1.78 per share cash offer.
Onyx's share price has slid since it announced its bid, however. At the close of the US markets last Friday, Onyx's bid would be valued at $US2.02 per Pivotal share.
The volatility of Onyx's stock was one reason Pivotal cited for rejecting the deal, along with Onyx's unprofitability and lack of experience with large mergers.
When Pivotal began considering its financial options and soliciting takeover proposals, its advisor did not seek a bid from Onyx because previous discussions between the firms convinced Pivotal that merging with Onyx would not create a stronger company, Pivotal said.
Onyx, Pivotal and Talisma all make sales, marketing and customer service software aimed at midmarket companies. With business software sales slumping for the last several years, smaller vendors in that market have been fighting to remain alive, a situation that has sparked consolidation among competing companies.
Onyx said its bid remained open.
While the company couldn't legally encourage Pivotal shareholders to reject the Oak/Talisma deal at Pivotal's shareholder meeting later this week, an Onyx spokesperson said, it issued a press release suggesting that shareholders would be able to express their opinions through their votes.