Oracle cleared for Portal software buy

Oracle Corp. announced Thursday it now has all necessary approvals to complete its acquisition of Portal Software Inc.

Oracle now has all necessary approvals to complete its acquisition of Portal Software, it said Thursday.

Last month, Oracle made a cash offer of approximately US$220 million, or US$4.90 per share, for Portal, which provides billing software for a variety of services to communications companies. Oracle plans to integrate this software with its own ERP (enterprise resource planning) software, along with elements of CRM (customer relationship management) from Siebel, another acquisition.

Aside from regulatory issues, the merger faced opposition from Berggruen Holdings North America, Portal's second largest shareholder with a 9.1 percent stake. "We calculate that Oracle's offer is at least 50 percent lower than the average Enterprise Value to Sales multiple of the universe of leading publicly traded communications software companies," said Joshua S. Horowitz, director of research for Berggruen, in an April 18 letter to Portal President and Chief Executive Officer David LaBuda.

"In addition, the company's US$60 million cash balance and greater than US$400 million in net operating loss tax carry-forwards highlight Portal's liquidity and ability to keep most of its future profits," Horowitz wrote. Oracle's release made no mention of any outstanding shareholder issues. With less than a 10 percent stake, Berggruen's clout would be insufficient to block the acquisition.

The deal is expected to close before the tender offer expires on May 22.

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