Robbins Arroyo LLP: Acquisition of NetSuite Inc. (N) by Oracle (ORCL) May Not Be in Shareholders’ Best Interests
Robbins Arroyo LLP is investigating the proposed acquisition of NetSuite Inc. (NYSE: N) by Oracle Corporation (NYSE: ORCL). On July 28, 2016, the two companies announced the signing of a definitive merger agreement pursuant to which Oracle will acquire NetSuite. Under the terms of the agreement, NetSuite shareholders will receive $109.00 for each share of NetSuite common stock.
Is the Proposed Acquisition Best for NetSuite and Its Shareholders?
Robbins Arroyo LLP’s investigation focuses on whether the board of directors at NetSuite is undertaking a fair process to obtain maximum value and adequately compensate its shareholders.
As an initial matter, the $109.00 merger consideration represents a premium of only 19% based on NetSuite’s closing price on July 27, 2016. This premium is significantly below the average one day premium of nearly 28.14% for comparable transactions within the past three years. Further, the $109.00 merger consideration is significantly below the target price of $130.00 set by an analyst at D.A. Davidson & Co. back on November 14, 2014. In the last three years, NetSuite traded as high as $120.77 on February 27, 2014, and most recently traded above the merger consideration – at $109.51 – on January 23, 2015.
On July 28, 2016, NetSuite reported strong earnings results for its second quarter 2016. NetSuite reported total revenue of $230.8 million for the three months ended June 30, 2016, a 30% increase over the same period of the prior year. NetSuite has also beaten analyst estimates for adjusted net income and adjusted earnings per share for the last four quarters, and has beaten analyst estimates for revenue in three of the past four quarters.
In light of these facts, Robbins Arroyo LLP is examining NetSuite’s board of directors’ decision to sell the company now rather than allow shareholders to continue to participate in the company’s continued success and future growth prospects.
NetSuite shareholders have the option to file a class action lawsuit to ensure the board of directors obtains the best possible price for shareholders and the disclosure of material information.
NetSuite shareholders interested in information about their rights and potential remedies can contact attorney Darnell R. Donahue at (800) 350-6003, or you can complete the form below and we will contact you directly.