The development took place after a majority of NetSuite shareholders voted in favor of the acquisition
Computer technology giant Oracle Corporation (NYSE:ORCL) announced that it will officially seal the acquisition of San Mateo based cloud computing company NetSuite Inc. (NYSE:N) in a $9.3 billion deal on Monday. This translates into a value of $109 per share. Although a major NetSuite shareholder, T.Rowe price Group had earlier stated that the company will seek additional offers, as it insisted to finalize a deal at $133 per share. The deal was finalized earlier today. .
The development took place after a majority of NetSuite shareholders voted in favor of the acquisition. NetSuite had received acquisition offers from other cloud computing giants such as Salesforce.com and Workday Inc. The acquisition offer was welcomed by shareholders of the cloud computing giant, as shares rose to $109, following the news. However, the argument by T.Rowe price group created concern among investors, as shares plummeted to $90. Now that the matter has been decided, we might again see a bull dominated session on Monday.
The deal would create positive synergies ahead, as Oracle and NetSuite have similar offerings. Historically, Oracle has not been one of the major players in cloud computing, thus the deal would indeed be a boost for the $155.4 billion technology giant. This is perhaps the biggest development over the weekend, while it will be interesting to see how investors of Oracle respond on Monday.
The street has held bullish views for both companies, as the consensus price target for Oracle Corporation offers over 20% upside, while NetSuite remains fairly valued. However, we may expect sell side firms to change their ratings on Monday before market. Considering the current market conditions, share price of Oracle may further decline until the external conditions improve.