UPDATE 3-NetSuite files to raise up to $99 million with IPO

(Adds analyst comment, detail on auction-based IPO, use of proceeds, market capitalization, industry background)

By Lilla Zuill

NEW YORK, Dec 5 (Reuters) - NetSuite Inc, a software maker majority-owned by Oracle Corp (ORCL.O) Chief Executive Larry Ellison, said on Wednesday it planned to raise up to $99 million in an initial public offering.

The company, which sells to small and mid-sized companies, filed to sell 6.2 million shares for $13 to $16 each, according to an amended statement with the U.S. Securities and Exchange Commission.

NetSuite executives are expected to begin meeting on Thursday with interested IPO investors, according to a person familiar with the plans. Companies selling shares to the public for the first time generally launch investor meetings, or "road shows," in the two weeks before a final IPO price is reached.

NetSuite's IPO will be conducted in an auction format, a process that gives investors rather than underwriters a strong voice in the final pricing.

While not common, auction-based IPOs have been used by some high-profile issuers. Options-trading firm Interactive Brokers Group (IBKR.O) raised $1.2 billion this year, and Google Inc (GOOG.O) used a modified auction format in its 2004 offering.

NetSuite said it would use IPO proceeds to pay down a line of credit from an Ellison-controlled company, which had a balance of $8 million as of Sept. 30, and for capital expenditure, including a second data center.

Based on the 59.5 million shares that will be outstanding after the offering, NetSuite is floating 10.4 percent of the company. At the top end of its pricing range, NetSuite's initial market capitalization would be $950 million.

The company, which first announced IPO plans in July, recently said Ellison would put his directly owned stake, equal to about 61 percent of outstanding shares, into a "lockbox."

That effectively strips him of voting rights, reducing conflict-of-interest concerns raised because of his position at Oracle, which NetSuite considers a potential competitor.

Oracle, co-founded by Ellison, sells similar types of software, but its products are aimed at larger corporations.

After the offering, Ellison and family members will beneficially own about 70 percent of the company.

TECH BUZZ

The value of new U.S. listings by technology companies have surged 120 percent this year, according to Richard Peterson, director of capital markets research for Thomson Financial.

Many tech shares have performed well since their debuts. Software maker VMWare Inc (VMW.N) is the second-best-performing IPO this year, rising 232 percent since its August opening.