Pivotal, which agreed last month to merge with Talisma in an Oak Investment Partners-financed deal, would not disclose any details about the new offer, including the name of the company that made it. The mysterious offer is the second unsolicited, 11th-hour bid for Pivotal in less than a week. Onyx, a competitor in the market for customer relationship management (CRM) software, launched its bid for Pivotal on Wednesday.
Pivotal shareholders were scheduled to vote Tuesday to approve the Talisma deal, but Pivotal has asked them to postpone the vote until Friday in order to give the Pivotal board time to review the new proposal.
Late Friday, Pivotal's board of directors cited several reasons for rejecting, which represented a 26 percent premium over Oak's competing bid. Among the directors' concerns about Onyx were the volatility of its stock, its inexperience with large mergers, its lack of profits and pending shareholder litigation against it.
Pivotal, headquartered in Vancouver, British Columbia, also cited high costs as a reason not to merge with Bellevue, Wash.-based Onyx. In addition to paying a $1.5 million breakup fee for canceling the deal with Oak, Pivotal would have to integrate a slew of overlapping software products with Onyx, Pivotal said in a statement.
"The unanimous recommendation of the Special Committee, which was accepted by the Board, was that such a transaction would not be in the best interests of Pivotal or its shareholders," Pivotal said in statement.
In response, Onyx issued a statement Monday, asserting that its proposal still stands. "Our acquisition offer remains on the table, and we are hopeful that we will have the opportunity to engage with Pivotal towards this goal," Onyx Chief Executive Brent Frei said in a statement.
In the original process of weighing potential bidders, Pivotal and its financial advisors had decided against a merger with Onyx and excluded the company from invitations to submit a bid, Pivotal added.
Talisma, Pivotal and Onyx all specialize in CRM applications for midsize businesses. Many CRM software companies have struggled over the past two years with stagnating sales and sinking shares, sparking a number of mergers.