Pivotal rejects Onyx bid

TORONTO (11/17/2003) - It has only taken five days for Pivotal Corp. to come up with an answer to the surprise acquisition proposal from fellow CRM solution maker Onyx Corp., made last Wednesday -- and that answer is no.

Vancouver-based Pivotal has firmly rejected the Onyx bid, which proposed a 26 percent premium over an October offer made by Oak Investment Partners -- an investment firm whose bid will essentially combine Pivotal and Talisma Corp., a Microsoft Corp.-based e-service solutions provider in Kirkland, Wash.

The Onyx offer was directed to the Special Committee of the Board of Directors of Pivotal, which confirmed late Friday that it did not support the proposal. The Committee considered numerous factors, but top of mind was how the deal would affect Pivotal shareholders.

In a statement, Pivotal cited the volatility and relative illiquidity of Onyx stock, the underperformance of Onyx share prices during the last 12 months as well as outstanding Onyx litigations and the company's history of small acquisitions and inexperience in completing large transactions as other key influences on its decision.

Additionally, Pivotal questioned the product synergies between the two CRM vendors and said that the potential loss of customers and absence of a financial sponsor make a merged Pivotal/Onyx company an unattractive entity.

However, this does not necessarily mean Pivotal has settled on the Oak bid. The Oak transaction is still awaiting approval from Pivotal's shareholders. The shareholder vote is set for Tuesday.

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