CDC Corporation (CHINA) says it is making a proposal to the board of directors of Onyx Software (ONXS) for a strategic transaction that would combine Onyx Software with CDC Software.

"We remain firm in our belief in the benefits of a combination, particularly between our Pivotal CRM division and Onyx," said Eric Musser, executive vice president of strategy, mergers and acquisitions for CDC Software. "This potential combination harbors benefits for both shareholders and customers of Onyx, including complementary industry specialization, products, geographic markets, sales channels and marketing strategies."

CDC has tried at least twice previously to purchase Onyx, but Onyx each time has refused a sale.

Subject to CDC Software being granted the opportunity to conduct and complete due diligence to its satisfaction, under the terms of CDC Software's new proposal, each Onyx shareholder would have a choice to receive, for each Onyx share, consideration consisting of either all-cash or cash-and-shares in CDC Corporation.

In the event an Onyx shareholder elects to receive all-cash consideration, the shareholder would receive, for each Onyx share, US$4.85 per share in cash.

In the event an Onyx shareholder elects to receive cash-and-shares, such shareholder would receive, for each Onyx share, US$5.00 per share comprised of 50% in cash and 50% in registered Class A Common Shares of CDC Corporation.

CDC says gthe proposal represents a premium of up to 4.2% in excess of the publicly announced offer made by M2M of US$4.80 per share in cash, excluding the effect of the US$4.5 million in break-fees and expenses Onyx would be required to pay to M2M. It is estimated that based upon approximately 18.5 million Onyx shares outstanding, the break-fees and expenses Onyx would be required to pay to M2M amount to in excess of $0.24 per Onyx share.

CDC Software says its management awaits a response from the independent members of Onyx's board of directors to its proposal.

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