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After being rebuffed by the Onyx Corp. board of directors, CDC Corp. announced today that it is withdrawing its $50 million offer for controlling interest in the company.
CDC, a subsidiary of the Chinese enterprise software vendor Chinadotcom purchased midmarket CRM vendor Pivotal in 2003 and made a bid for rival Seattle-based Onyx at the end of December 2005. CDC publicized its offer for Onyx, issuing a press release that said it was offering $50 million for controlling stake in the company that would leave Onyx a private company.
CDC claimed it had to take its message to the press because it was unsuccessful in engaging Onyx's board. Onyx, however, responded with surprise at CDC's public move, saying simply that it was difficult scheduling executive meetings around the holidays. One week later, Onyx's board responded with an unequivocal "no," citing CDC's recent financial returns and the "dilutive effect to Onyx shareholders."
So today, CDC turned its attention away from midmarket CRM applications and toward supply chain, announcing an agreement to purchase JRG Software Inc., a hosted supply chain software company based in San Mateo, Calif. Terms of the agreement were not released.
In a statement issued today, CDC said it believes a combined Onyx and CDC would still be complementary but it was withdrawing its offer because the risks of the transaction were heightened due to Onyx's lack of receptiveness.
"We appreciated that some of Onyx's largest shareholders took the time to listen to our proposal and we found the dialogue very helpful," Steven Chan, acting CEO of CDC, said in a statement. "However, given the circumstances and our inability to have discussions with any of Onyx's board members, we have reluctantly decided it is time to move on.
CDC had complained that it was unable to meet with Onyx's board and was given only a 30-minute phone call with Onyx's CEO Janice Anderson. Onyx responded that Anderson relayed the offer and spoke for the board.
Chan and Rick Marquardt, CDC president, pledged to travel the country meeting with Onyx shareholders to explain their offer in person.