Ellison's NetSuite looks to raise $99 million in IPO

On-demand applications company sets an initial pricing range of $13 to $16 a share for its long-anticipated debut.

Larry Ellison's on-demand applications company, NetSuite, is getting ready to hit the road with its story for investors. The company set its initial pricing range on Wednesday, noting it hopes to raise up to $99.2 million.

NetSuite set an initial range of $13 to $16 a share for the 6.2 million shares it plans to release in its IPO, according to NetSuite's filing with the Securities and Exchange Commission.

The stock is slated to trade on the New York Stock Exchange, under the ticker symbol "N."

NetSuite's IPO is currently planned for December 21, but The Wall Street Journal, citing observers, notes the offering could launch sooner, should investor interest be strong.

Investors have been glomming onto technology issues in a big way this year, with VMware, for example, rocking up to $55.50 a share on its first day of trading from its IPO price of $29 a share. On the international scene, business-to-business site Alibaba tripled its share price on its debut on the Hong Kong market.

NetSuite, however, may have initially run into some turbulence with its offering plans when it filed in July. Ellison's Tako Ventures, which is a wholly owned subsidiary of Lawrence Investments, and a family members hold a 74 percent stake in NetSuite. NetSuite had previously indicated that Tako would retain control of the company post-IPO. As a result, that would have meant that Ellison, CEO of Oracle, could nix a buyout of NetSuite, even if NetSuite investors or its management wanted to pursue that route.

But NetSuite since modified those plans in October, noting in a later SEC filing that Ellison planned to transfer Tako's stake into a "lock box," in which he would no longer have direct control over the company. Tako's stake was 60 percent at the end of the September quarter.

In the filing, the company noted: "We have been told that Mr. Ellison is making the transfer in view of his position and duties at Oracle, to effectively eliminate his voting control over the election of our directors and other matters, and to avoid potential future conflicts of interest that might otherwise arise."

Ellison may not have control over NetSuite, but that pain will likely be offset from the financial pop he'll get from the IPO.

 

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