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Oracle could be about to buy NetSuite - rumors

Last updated: 12:01 21 Jul 2016 EDT, First published: 07:01 21 Jul 2016 EDT

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Are they about to announce Netsuite buy?

Oracle Corporation (NYSE:ORCL) is on the brink of announcing its buyout of cloud computing rival NetSuite Inc (NYSE:N), according to unconfirmed market rumors on Thursday.

Gossips reckoned NetSuite has delayed publication of financial results due this week until next week because the pair want to unveil the deal beforehand.

Oracle, the company behind the global development platform Java and Javascript, is rumored to be putting the finishing touches to the deal, including plans to set up a new retail cloud-computing division spearheaded by NetSuite.

Oracle founder and CTO Larry Ellison and his family are understood to own more than 40% of NetSuite stock. Oracle was unavailable to comment. However, the company is said to have secured the support of three of its major shareholders for the takeover of the shares it does not already own.

A market source said: "They want to get the deal announced before the figures and that's what they're finalising."

Oracle has previously declined to comment on the rumors and NetSuite did not respond to Proactive Investors' requests for comment.

On Wednesday, Europe's biggest software company SAP SE (ETR:SAP) reported a better-than-expected quarterly operating profit, boosted by software licence sales in Europe.

Second-quarter operating profit, excluding one-off items, rose 9% to €1.52bn, beating an average market consensus of €1.45bn.

SAP chief executive Bill McDermott told CNBC: "We've had a trifecta of software revenue growth, cloud revenue growth and operating income all in double digits, which is clearly like no other company in our industry."

Oracle is keen to expand in cloud services, extra sales of which are expected this year to cover lost sales in its larger core software business.

It said last month that it planned to be the first company to reach US$10bn in cloud revenues, throwing down the gauntlet to rival Salesforce.com.

It has previously been speculated that Oracle would use some of the proceeds of a huge US$14bn bond sale at the end of last month to fund the NetSuite deal.

Updated to include analyst commentary.

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