Eloqua Facing Shareholder Lawsuit Over Oracle Acquisition


A former Eloqua employee and current shareholder is suing the company's senior management for allegedly agreeing to be acquired by Oracle last month for significantly less than fair market value.

Oracle announced its $871 million acquisition of Eloqua, a Vienna., Va.-based SaaS vendor focused on marketing automation apps, on Dec. 20. The deal amounted to $23.50 per share, a 31 percent premium from Eloqua's Dec. 19 closing price of $17.92.

Brad Kahl, a shareholder who worked at the company as a software developer from June 2011 to July 2012, claims the acquisition is "unfair" to Eloqua shareholders and is the result of "conflicts of interest," according to a Monday press release by Shareholders Foundation, a San Diego-based firm that describes itself as a "professional loss-prevention, settlement recovery, portfolio monitoring service."

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In a Dec. 20 tweet Kahl invited other Eloqua shareholders to voice their concerns with the deal, claiming that Oracle bought Eloqua for $4 per share less than what it was worth.

Kahl filed suit on Jan. 3 in the U.S. District Court for the Eastern District of Virginia, the Washington Business Journal reported Tuesday.

Defendants listed in Kahl's lawsuit include Joseph Payne, Eloqua chairman and CEO; Thomas Reilly, former Arcsight CEO and Hewlett-Packard vice president of enterprise security, who joined Eloqua's board of directors last June; as well as several venture capitalists on Eloqua's board, and Oracle itself.

Eloqua could not be reached for comment on the lawsuit. An Oracle spokesperson reached by CRN declined comment.

Attempts to reach Kahl, who is currently a software engineer at Weddingwire.com, Bethesda, Md., were unsuccessful.

Eloqua, founded in 2000, raised more than $90 million in its August IPO. However, Eloqua posted losses in 2010 and 2011 and previously warned investors that it might have trouble maintaining consistent profitability.

Oracle, meanwhile, has been steadily building its cloud portfolio, adding call center apps with its $1.5 billion acquisition of RightNow last October; human resource management apps with its $1.9 billion acquisition of Taleo in February; and data analysis apps for utility companies with last month's pickup of DataRaker.

PUBLISHED JAN. 9, 2013