Oracle Ups Offer for India's i-flex solutions

Oracle boosted its offer for India's i-flex solutions by 42%, with the aim to buy an additional 35% of the banking software provider for $1.3 billion.

Oracle, the world's biggest maker of database software, said it wanted to take its stake in i-flex to 90% and raised the price it is willing to pay to 2,100 rupees per share, up from the previous 1,475 rupees.

The revised offer represents a 20% premium to i-flex's closing stock price of 1751 rupees on Thursday. It values i-flex at 49 times forecast earnings, versus a sector average of Indian application software makers of 24.

"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," Oracle Chief Executive Larry Ellison said in a statement.

Oracle already owns 55% of i-flex and in September offered to pay up to $531 million to lift its stake to 75%. "This is the last opportunity for i-flex shareholders to tender their shares
to Oracle."

The new offer means Oracle is bidding for nearly 28.4 million shares of i-flex worth 59.5 billion rupees, or $1.3 billion. An Oracle spokesman confirmed that calculation but declined to say why the company had revised its proposal.

I-flex counts financial giants such as Citigroup and HSBC among its clients and saw second-quarter revenue jump 40% to 5 billion rupees.