Portal takeover to boost Oracle’s enterprise apps

Oracle Corp. finally assumed ownership of Portal Software Inc. Wednesday, having accepted about three-quarters of the billing and revenue-management software vendor’s shares.

It’s been a hard-fought battle. In the course of its wooing of Portal shareholders, Oracle had to renew its tender offer for the company twice, with the latest bid expiring Tuesday at 12 a.m. EDT.

By Tuesday, Portal shareholders had tendered 32 million shares, around 74 percent of the company’s outstanding stock. Oracle is holding the door open for shareholders to tender the remaining 26 percent of Portal’s stock, offering the same US$4.90 per share cash consideration as its initial bid until June 30 at 8 p.m. EDT.

Oracle first announced plans to buy Portal in April for $4.90 per share, valuing the company at around $220 million.

Despite already having the blessing of Portal’s board of directors and gaining the necessary regulatory approvals, the database and applications vendor had trouble convincing Portal shareholders of the merits of the acquisition.

Portal’s second largest shareholder Berggruen Holdings North America Ltd. publicly voiced its disapproval, firing off several angry letters to Portal President and Chief Executive Officer Dave Labuda. Berggruen maintained that Portal tried to rush through the sale of the company to Oracle at a knock-down price. Berggruen holds a 9.1 percent stake in Portal.

Both Portal and Oracle pointed to the vendor’s ongoing financial issues putting Portal’s continued viability in question. Portal was delisted from Nasdaq last year and remains delinquent in financial filings to the U.S. Securities and Exchange Commission.

Portal’s software enables communications companies to bill and manage a range of services including wireline and wireless phones, broadband, cable, VOIP (voice over Internet Protocol), IP television, music and video.

Oracle sees the purchase as highly strategic and plans to integrate Portal’s software into its ERP (enterprise resource planning) applications and the CRM (customer relationship management) products it acquired through the purchase of Siebel. Although Portal has focused on the telecommunications and media industries, Oracle has said it may look to expand the use of the software to other verticals.

Portal is set to become a global communications unit within Oracle focused on billing and revenue management. Bhaskar Gorti, Portal’s senior vice president of worldwide sales, services, marketing and alliances, will head the unit at Oracle as general manager.

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