The Hindu Business Line : Oracle ups open offer price, size for i-flex Solutions

Oracle has revised its open offer for the publicly held shares of banking software company i-flex Solutions, raising the offer price by 41 per cent and the offer size to 34 per cent of i-flex's equity stake, up from 20 per cent previously.

The company is now willing to spend Rs 5,916 crore for buying 34 per cent stake to raise its holding to nearly 90 per cent, as against Rs 2,450 crore that it was willing to spend earlier for 20 per cent stake at Rs 1,475 per share.

The revised open offer will also offer an additional Rs 16 per share as interest for delay of the open offer.

(Oracle, which had originally announced that its open offer would commence on November 6 this year, had postponed the date to December 4, giving no reasons. On the date of that announcement, November 7, i-flex shares were quoting at Rs 60 higher than the open offer price.)

The current offer will close on December 23. Oracle did not give reasons for revising its open offer either, but analysts pointed out that the multinational did appear "extremely keen" to up its stake in i-flex.

"There will not be another open offer and Oracle will not undertake a delisting for at least the next five years unless i-flex shares are selling at a significantly lower price than they are today," the Oracle CEO, Mr Larry Ellison, said in a statement.

"This is the last opportunity for i-flex shareholders to tender their shares to Oracle," he said.

DSP Merrill Lynch is acting as manager for the open offer.

"It is a simple open offer, not a delisting offer," said an official with DSP Merrill Lynch.

An open offer had become mandatory after Oracle's stake in i-flex rose to 55 per cent from 52.5 per cent following a preferential allotment of shares by i-flex to Oracle in August this year.

This was occasioned when i-flex raised funds from Oracle to fund its acquisition of US-based Mantas for $122 million (Rs 550 crore).

But analysts see the upping of offer size as a proactive move. "Oracle is keen to expand aggressively, and i-flex has banking software capabilities that Oracle does not yet own," said one of them.

Oracle's global presence will help i-flex grow its business even faster, he said.

Last year, Oracle had bought over 42.41 per cent stake in i-flex from Citigroup for $593 million (Rs 2,700 crore).

Shares of i-flex closed at Rs 2,048, on the BSE, gaining 17 per cent over the day.