Sunday, June 26, 2022

Pivotal delays acquisition vote

Pivotal Corp. postponed until December a shareholder vote scheduled for last Friday on its pending acquisition by an investment firm planning to merge the company with another customer relationship management (CRM) software maker, Talisma Corp.

Pivotal plans to use the extra time for negotiations with CDC Software, a Chinadotcom Corp. unit that submitted a last-minute acquisition offer for Pivotal. Pivotal’s board recommended last week that the company reject CDC’s offer because of the proposal’s many conditions and the risk the deal would never be completed. The company recommended shareholders approve its previously negotiated takeover plans, for an acquisition by Oak Investment Partners followed by a merger with Talisma. [Please see Pivotal rejects Chinadotcom unit’s takeover bid.]

CDC responded to Pivotal’s rejection by offering to shorten its due-diligence timetable. Pivotal said Friday it will take CDC up on that offer. The company plans to work with CDC this week to determine whether a deal superior to Oak’s can be arranged.

CDC has until Sunday to come up with a final, irrevocable offer. Pivotal plans to issue a release on Dec. 1 detailing its discussions with CDC. If no deal with CDC is reached, Pivotal intends to hold a shareholders’ meeting on Dec. 3 to approve or reject the Oak agreement.

Pivotal, based in Vancouver, became the unexpected target of a bidding war this month among several vendors in the fiercely competitive business software market. Pivotal makes sales, marketing and customer service applications tailored for midmarket companies. With sales in the sector slumping, vendors are scrambling to find new ways to grow.

Financially struggling Pivotal went shopping several months ago for buyers. After it announced its plans to be purchased by Oak, a rival vendor not included in Pivotal’s bid solicitation, Onyx Software Corp., submitted an unsolicited acquisition offer. Pivotal’s board rejected Onyx’s stock-swap offer as riskier than and inferior to Oak’s all-cash bid.

Soon after Pivotal spurned Onyx, CDC, which Pivotal says declined to submit an offer during its call for bids, changed its mind and submitted an unsolicited bid offering higher per-share cash payments than Oak did.

If CDC succeeds in acquiring Pivotal, the company says it will integrate Pivotal’s CRM software with other business applications it has acquired to create a full-service suite aimed at midmarket customers, particularly in the manufacturing industry.

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Jim Love, Chief Content Officer, IT World Canada

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