Pivotal has postponed a shareholder vote, due to take place last Friday, on its pending acquisition by an investment firm which wants to merge the company with customer relationship management software maker Talisma.
The vote will now take place next month. Pivotal will use the extra time for negotiations with CDC Software, a Chinadotcom unit, which submitted a last-minute acquisition offer for Pivotal.
Pivotal's board recommended last week that the company reject CDC's offer because of the proposal's many conditions and the risk the deal would never be completed. The company recommended shareholders approve its previously negotiated takeover plans, for an acquisition by Oak Investment Partners followed by a merger with Talisma.
CDC responded to Pivotal's rejection by offering to shorten its due-diligence timetable. Pivotal said on Friday it will take CDC up on that offer. The company will work with CDC this week to determine whether a deal superior to Oak's can be arranged.
CDC has until Sunday to come up with a final, irrevocable offer. Pivotal will issue a release on 1 December detailing its discussions with CDC. If no deal with CDC is reached, Pivotal intends to hold a shareholders' meeting on 3 December to approve or reject the Oak agreement.
Pivotal became the unexpected target of a bidding war earlier this month among several companies in the fiercely competitive business software market. Pivotal makes sales, marketing and customer service applications tailored for midmarket companies. With sales in the sector slumping, companies are scrambling to find new ways to grow.
Pivotal went shopping several months ago for buyers. After it announced its plans to be purchased by Oak, rival Onyx Software submitted an unsolicited acquisition offer. Pivotal's board rejected Onyx's stock-swap offer as riskier than and inferior to Oak's all-cash bid.
Soon after Pivotal spurned Onyx, CDC which, according to Pivotal, declined to submit an offer during its call for bids, changed its mind and submitted an unsolicited bid offering higher per-share cash payments than Oak.
If CDC succeeds in acquiring Pivotal, the company will integrate Pivotal's CRM software with other business applications it has acquired to create a full-service suite aimed at midmarket customers, particularly in manufacturing.
Stacy Cowley writes for IDG News Service