Filed by Onyx Software Corporation
Pursuant to Rule 425 under the Securities Act of 1933
And deemed filed pursuant to Rule 14a-12 and Rule
14d-2 Under the Securities Exchange Act of 1934
Subject Company: Pivotal Corporation
Commission File No. 0-26867
IMPORTANT INFORMATION
The communications included in this filing are not solicitations of a proxy from
any security holder of Pivotal Corporation or Onyx Software Corporation. Nor are
these communications an offer to purchase nor a solicitation of an offer to sell
securities. Any offer will be made only through an exchange offer statement,
information circular, proxy statement or similar document. Investors and
security holders are strongly advised to read such document regarding the
proposed business combination referred to in this communication, if and when
such document is filed and becomes available, because it will contain important
information. Any such document would be filed by Onyx Software Corporation with
the U.S. Securities and Exchange Commission (SEC). Investors and security
holders may obtain a free copy of such document (if and when filed and
available) and other relevant documents related to the proposed business
combination on the SEC's web site at: . Any such document and
related materials may also be obtained for free by directing such requests to
Onyx at 425-451-8060. Onyx Software Corporation and its executive officers and
directors may be deemed to be participants in the solicitation of proxies from
Pivotal Corporation and Onyx Software Corporation security holders in favor of
the proposed transaction, should Onyx Software Corporation solicit such proxies.
Information regarding the security ownership and other interests of Onyx
Software Corporation's executive officers and directors will be included in any
such exchange offer statement, information circular, proxy statement or similar
document.
FORWARD-LOOKING STATEMENT
The content of the communications included in this filing may contain
forward-looking statements, including statements about the likelihood that the
Pivotal Board of Directors will accept the Onyx proposal, the anticipated
economic performance of Onyx and Pivotal as a combined company and the impact of
the proposed transaction on shareholders of Onyx and Pivotal. Forward-looking
statements are based on the opinions and estimates of management at the time the
statements are made and are subject to risks and uncertainties that could cause
actual results to differ materially from those anticipated in the
forward-looking statements. The words "believe," "expect," "intend,"
"anticipate," variations of such words, and similar expressions identify
forward-looking statements, but their absence does not mean that the statement
is not forward-looking. These statements are not guarantees of future
performance and are subject to risks, uncertainties and assumptions that are
difficult to predict. Factors that could affect Onyx's actual results include,
but are not limited to the risk that the Pivotal
Board of Directors elects not to accept the Onyx proposal, the risk that Onyx
and Pivotal are unable to reach a definitive agreement, the risk that even if
such a definitive agreement is reached that the resulting business combination
will not realize the anticipated economic benefits, the risk that Onyx common
stock declines or otherwise underperforms over time, the risk that the attention
of Onyx's management is diverted from the operation of its core business and the
"Important Factors That May Affect Our Business, Our Results of Operations and
Our Stock Price" described in our quarterly report on form 10-Q for the period
ended September 30, 2003. Readers are cautioned not to place undue reliance upon
these forward-looking statements that speak only as to the date of this filing.
Onyx undertakes no obligation to update publicly any forward-looking statements
to reflect new information, events or circumstances after the date of this
release or to reflect the occurrence of unanticipated events
***
[Onyx Software Corporation has posted hyperlinks on its website to the
following articles about the proposed transaction with Pivotal Corporation that
include quotes from interviews with members of Onyx's senior management. These
articles were authored by third parties and should not be viewed as statements
by Onyx Software Corporation.]
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SEATTLE POST-INTELLIGENCER
November 14, 2003
VENTURE CAPITAL: BIDDING FOR PIVOTAL BY OAK, ONYX GETS NASTY
By JOHN COOK
SEATTLE POST-INTELLIGENCER REPORTER
Silicon Valley venture capital firm Oak Investment Partners came out
swinging yesterday in the high-stakes prizefight over its cash offer to buy
Pivotal Corp., a Vancouver, B.C., software company.
In a less-than-flattering news release, Oak described competing bidder
Onyx Software Corp. as a "distressed company facing a very uncertain future"
with a stock that is "highly volatile and thinly traded."
The news release yesterday morning went on to say that the offer from Oak
and Kirkland-based Talisma -- a $1.78-per-share cash deal that values Pivotal at
about $45 million -- was better for shareholders and far less risky. It also
criticized the "eleventh hour nature" of the Onyx proposal.
Executives at Bellevue-based Onyx, which made an unsolicited $59 million
bid on Wednesday, say their stock offer is the best deal on the table. They said
the deal was constructed as quickly as possible following a Securities and
Exchange Commission filing by Pivotal on Oct. 25.
"The response from Oak is exactly what we expected they would say," said
Ben Kiker, chief marketing officer at Onyx. "We believe the reason our offer is
superior is because it is. It provides a great premium to Pivotal shareholders
today, and it also gives them the opportunity to participate in the upside of
the combined entity of Onyx and Pivotal."
Analysts and investors agreed, saying Onyx and Pivotal are a better match.
"The Onyx deal is better," said one analyst who asked that his name not be
used. "Bottom line for the Oak deal is that it is going to be hard for (Pivotal)
investors to go to a meeting and vote on this when it is at a price below where
the stock is trading."
Shares of Pivotal lost 13 cents yesterday to close at $1.87, 9 cents above
the Oak/Talisma offer.
Alan Davis, an analyst at McAdams Wright Ragen, said Onyx has traded
higher in the recent past. That means Pivotal shareholders could reap bigger
gains if Onyx returned to
those levels. Even if the stock does not appreciate, Davis said, "the Onyx deal
is certainly higher than $1.78" being offered by Oak.
Shares of Onyx fell 7 cents to close at $4.30.
Much is at stake as Onyx and Oak battle over Pivotal.
Facing slumping sales and the unnerving notion that Microsoft Corp. could
be moving into the midmarket for customer relationship management, or CRM,
software, Onyx needs to find a profitable growth strategy before the
consolidation wave hits.
Oak, on the other hand, is looking to toss a lifeline to Kirkland-based
Talisma, a smaller CRM software firm that has consumed more than $55 million in
venture capital over the past nine years. A merger between Pivotal and Talisma
could be one of the few ways to salvage that investment, said Onyx's Kiker.
"The real motivation for Oak to do this deal is that they need an ability
to unload the assets that they have in Talisma," Kiker said. "Oak has put a
significant amount of money into that operation only to see it not get a lot of
traction, and now they are looking at $45 million to $48 million to pay off
Pivotal shareholders. I have to believe the Oak limited partners would be saying
'enough is enough.' "
Executives at Oak were not available for comment. Talisma Chief Executive
Dan Vetras, who was traveling in India, also was unavailable.
Pivotal's board of directors has until 2 p.m. today to decide whether to
consider the Onyx counteroffer. Pivotal shareholders were scheduled to vote
Tuesday on the Oak/Talisma deal, a meeting that Oak said should proceed.
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DESTINATION CRM
November 17, 2003
ONYX EXTENDS ITS PIVOTAL BID
by Martin Schneider
Onyx Software announced this morning that it has extended its offer to
acquire Pivotal Corp. past its original Friday deadline. Onyx says it will keep
the offer on the table until Pivotal's next shareholders meeting, which has been
postponed until November 21.
The company has also reiterated that it its offer for Pivotal is superior
to Pivotal's original plan to be bought by Oak Investment Partners, and to
subsequently be merged with Talisma.
"We feel we are in a position where we are gathering a lot of momentum,
and this acquisition just makes sense," says Patrick Angelel, vice president of
marketing and alliances at Onyx. "It would increase the leadership position we
already have in the midmarket."
An Onyx/Pivotal merger better benefits Pivotal customers and shareholders
several ways, according to Angelel. It offers Pivotal's shareholders equity
participation in what would be the second-largest pure-play CRM vendor. It is
expected to result in $2 million in quarterly operational savings. It does not
require financing as a condition. Last, it provides the opportunity for Pivotal
employees and shareholders to participate in the possible upside of a publicly
traded stock.
Although it initially rejected Onyx's offer, Pivotal has decided to
postpone a shareholder vote on the Oak offer until Friday, so that it can give
its shareholders the opportunity to review and understand recent developments,
as well as a third acquisition offer from an unnamed party. Pivotal said on
November 14 that the instability of Onyx's stock, coupled with other risks, made
the two companies an ill-fitting merger.
"We have actively included Onyx throughout this whole process, keeping a
dialogue with Onyx about what we wanted in a merger, and they did not meet our
criteria," says Bo Manning, president and CEO of Pivotal. "For a small premium
over the Oak deal, we would be trading off the certainty of a cash offer."
However, Sheryl Kingstone, CRM program manager at the Yankee Group, says
the Onyx offer is superior when one looks farther down the road. "It is better
than the deal with Talisma, [because] the two companies are stronger together,"
she says. "[Although] Oak has committed substantial capital to invest in the
combined entities, the economies of scale and domain of expertise of the
combined Onyx/Pivotal deal is better for the future."
INFOWORLD/IDG NEWS SERVICE/COMPUTERWORLD
November 17, 2003
PIVOTAL REJECTS ONYX BUYOUT BID
COMPANY CONSIDERS NEW SUITOR
The pending acquisition of midmarket CRM (customer relationship
management) software vendor Pivotal Corp. is turning into a game of musical
chairs.
The company's board rejected late Friday rival Onyx Software Corp.'s
unsolicited acquisition bid in favor of sticking with a previously announced
plan for a private investment firm to take over Pivotal and merge it with
Talisma Corp. On Monday, however, the company said it would delay for several
days a shareholder vote on the Talisma deal to give Pivotal's board time to
consider an "unsolicited highly conditional" proposal presented to Pivotal by an
unnamed party.
The new proposal is a preliminary one, and may not develop into a formal
offer, Pivotal said in a press release. Representatives from Pivotal could not
immediately be reached for comment.
Pivotal now hopes to hold on Friday a vote previously scheduled to take
place Tuesday at a shareholder meeting in Vancouver, Pivotal's hometown. Pivotal
said it will seek at Tuesday's meeting an adjournment until Friday afternoon.
Pivotal agreed in early October to an all-cash buyout by Oak Investment
Partners, which plans to merge Pivotal with Talisma, another software maker in
Oak's investment portfolio. Onyx, a close competitor to Pivotal, offered last
week to acquire the company in a stock swap deal. Onyx offered 0.475 Onyx shares
per Pivotal share, a trade valued at the time of the announcement at $2.25 per
Pivotal share, topping Oak's $1.78 per share cash offer.
Onyx's share price has slid since it announced its bid, however. At
Friday's closing prices, Onyx's bid would be valued at $2.02 per Pivotal share.
The volatility of Onyx's stock was one reason Pivotal cited for rejecting
the deal, along with Onyx's unprofitability and lack of experience with large
mergers. When Pivotal began considering its financial options and soliciting
takeover proposals, its advisor did not seek a bid from Onyx because previous
discussions between the firms convinced Pivotal that merging with Onyx would not
create a stronger company, Pivotal said.
Onyx, Pivotal and Talisma all make sales, marketing and customer service
software aimed at midmarket companies. With business software sales slumping for
the last several years, smaller vendors in that market have been fighting to
remain alive, a situation that has sparked consolidation among competing
companies.
Bellevue, Washington-based Onyx said its bid remains open. While the
company can't legally encourage Pivotal shareholders to reject the Oak/Talisma
deal at Pivotal's shareholder meeting later this week, according to an Onyx
spokeswoman, it issued a press release suggesting that shareholders will be able
to express their opinions through their votes.
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SEARCHCRM
November 17, 2003
PIVOTAL'S BOARD REJECTS ONYX
By Jon Panker, SearchCRM.com News Editor
The board of directors at Pivotal Corp. is recommending that shareholders
reject Onyx Software Corp.'s unsolicited takeover and said it is now considering
another offer to acquire the company.
The board cited several reasons for opting against the Onyx offer, notably
its midmarket CRM rival's financial health. Executives at Vancouver, British
Columbia-based Pivotal mentioned the "volatility and relative illiquidity" of
Onyx stock, Onyx's lack of experience with larger acquisitions and its "limited
access to capital."
Onyx issued a release this morning vowing to pursue the takeover.
Pivotal has not provided details on the latest offer to buy the company,
calling it a "highly conditional proposal."
"We're not allowed to say [more] as a condition of the offer," Pivotal CEO
Bo Manning told SearchCRM.com.
Last week Onyx made an all-stock play for Pivotal, offering 0.475 shares
of Onyx for each Pivotal share. The proposal came one month after Pivotal had
accepted a $48 million cash bid from private equity firm Oak Investment
Partners. Oak intended to merge Pivotal with e-service software firm Talisma
Inc., though its deal is still subject to Pivotal shareholder approval.
Investors are scheduled to vote on the Talisma merger tomorrow, but
Pivotal said it will postpone that vote until Friday. In the meantime, a special
committee set up to evaluate acquisition offers will weigh this latest proposal
from the unnamed suitor, Manning said.
If investors ultimately opt for Onyx, the Bellevue, Wash.-headquartered
vendor plans to merge the two midmarket product lines and promises the combined
company would benefit from significant cost synergies. It would also become the
second largest pure-play CRM vendor behind Siebel Systems Inc.
In making its recommendation, Pivotal's board said it had received "a
number of strong and unsolicited expressions" of customer concern. It also said
overlaps in Pivotal and Onyx offerings would result in "few cross-selling
revenue synergies" and higher support costs.
"[Onyx] is a company that could go through this process and, in the end,
say it doesn't want to do a deal -- with no harm to them and huge harm to us,"
Manning said.
Patrick Angelel, Onyx vice president of marketing and alliances, said the
company didn't go to "all this effort just to scuttle Pivotal's plans." While
committed to the deal, Angelel added that Onyx is "in a position to thrive on
our own should this acquisition not materialize."
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