Oracle to Buy Siebel for $5.85B
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Oracle Corp. (ORCL) on Monday said it will buy rival software company Siebel Systems Inc. (SEBL), which has been long-mentioned as a possible takeover target, for $10.66 a share in a deal that valued Siebel at $5.85 billion.
Oracle, which will become the world's biggest customer relationship management software maker if the deal goes through, said the agreement was worth $3.61 billion after subtracting Siebel's $2.24 billion in cash.
The price per share represents a 16.8 pct premium to Siebel's closing share price of $9.13 on Friday.
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Siebel gained prominence in the late 1990s as a top maker of software that helps companies better understand and manage their relationships with customers, one of the market's fastest-growing areas.
But as Siebel's share of that market gets chipped away by stiff competition, analysts have increasingly considered it a prime takeover prize for a rival like Oracle.
Shares of Siebel jumped almost than 14 percent to $10.39, while Oracle's shares fell 1.7 percent to $13.06.
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Kaufman Brothers analyst Peter Jacobson said some shareholders might call for Oracle to pay more, but he noted that Siebel has struggled with performance and undergone a lot of organizational change.
"More often than not, these deals go through at agreed-to valuations," Jacobson said.
Oracle said the companies' joint customers have recommended such a deal for more than a year, and Siebel tagged the combination of its software applications with Oracle's development capacity as one of the deal's strengths. Most of Siebel's systems run on the Oracle database.
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Siebel shareholders will receive $10.66 per share in cash unless they elect to be given Oracle common stock — but no more than 30 percent of Siebel's common shares will be exchanged for Oracle stock. The companies expected the deal to close early next year.