CDC looms over Onyx again

Oodles of news and buzz from Onyx’ way today, with media outlets everywhere presenting a different spin on events. The short story here is that Hong Kong-headquartered CDC has put in yet another bid for the reluctant Bellevue, Wash.-based Onyx Software. Many news sources, including this website, had figured the purchase of Onyx by M2M Holding to be a done deal: “Onyx Software will be acquired by privately held M2M Holdings for US $92 million in cash, or US $4.80 a share,” read the information in press releases.

Onyx was to have become a division of M2M’s enterprise-software company, Made2Manage Systems. Onyx headquarters would have remained in Bellevue, but the fate of its 250 employees was subject negotiations already taking place between Onyx and M2M. At that time, Onyx directors and officers representing 17.6 percent of outstanding shares agreed to the acquisition by M2M. Onyx rejected the initial offer from CDC, which had valued Onyx at US $50 million. This bid came from the CDC software unit, was unsolicited and was summarily rejected. In March, with the second offer, CDC, which operates the china.com portal, raised the bid to $4.57 a share, or about $80 million, in cash. That also didn’t work. The response from Onyx? A month later, the company took on investment banker Piper Jaffray to help evaluate its strategic options, with the decision to sell to M2M. A done deal. Until today, when the hostile takeover bid returned.

Onyx has topped the US $92 million offer proffered by M2M in a third offer. The Insight Exec website quoted Eric Musser, executive vice president of strategy, mergers and acquisitions for CDC Software, as saying, “We remain firm in our belief in the benefits of a combination, particularly between our Pivotal CRM division and Onyx.” Is someone under the “three strikes, you’re out” rule here? Musser went on to say that the deal “harbors benefits for both shareholders and customers of Onyx, including complementary industry specialisation, products, geographic markets, sales channels and marketing strategies.” This last bit provides a nice view of why CDC is so desperate to snag Onyx. Over at IT Week, they ran the story under the titillating headline “New bidder courts CRM specialist Onyx.” (Awww, courting. Isn’t that nice?)

The writer “IT Week Staff” interestingly quoted the recent Gartner analysis (see today’s entry on the subject) warning that Oracle will “need to aggressively market the advantages of a combined solution to overcome the lack of demand for a synergized solution.” You’ve got to have synergy. CRN ran the Reuters report on the on-again off-again acquisition / hostile takeover. Good old Reuters gave the lowdown in terms of numbers: “CDC’s software division proposed giving Onyx shareholders a choice of US $4.85 cash per Onyx share, or US $2.50 cash plus US $2.50 worth of CDC Class A common stock per Onyx share.” This amounts to a total of $93 million to $96 million. Onyx company spokesman Bob Craig said the CDC offer would now be evaluated.