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Oracle close to buying out i-flex totally

Billionaire Larry Ellison's Oracle is finally ready to stop cutting corners over the acquisition that put an Indian-made software product in global limelight, reports Venkatesh Ganesh and Indulal PM.

business Updated: Mar 20, 2008 21:40 IST

A war over buying a small residual stake in banking software firm I-flex solutions, which pioneered a product revolution in the country, appears to be close to an end.

Billionaire Larry Ellison's Oracle, the world's second largest business software company that acquired controlling stakes in the Bangalore-born i-flex for Rs. 2700 crore ($593 million) is finally ready to stop cutting corners over the acquisition that put an Indian-made software product in global limelight.

According to informed sources, Mauritius-based Oracle Global, the holding company of Oracle Corp, which currently owns an 80.58 per cent stake in i-flex wants to buy out the remaining 14733779 shares or 19.42 per cent in the company, valued at Rs. 1362 crore based on the current price of around Rs. 924.75

I-flex shares have fallen 52.8 per cent in the period since January 27. Current prices are well below the peak price that Oracle had offered to minority shareholders.

When contacted an Oracle spokesperson in the US declined to comment.

In August 2006 Oracle upped its offer to acquire a further 20 per cent and dangled a carrot of Rs. 2100 rupees ($46.9) per share at i-flex investors, which was 20 per cent higher than the I-flex stock price at that time.

However, Oracle’s appetite was not whetted and the company indicated that it wanted a larger stake in the firm and said that it would bid for 90 per cent of i-flex.

Subsequent to the offer, Oracle was able to increase its stake to 80.58 per cent and some foreign institutional investors and other institutions felt that in a strong market coupled with de-listing fears they felt that the Rs. 2100 tag was too little.

However, Oracle stood with its offer. "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," CEO, Larry Ellison, said in a statement.