Naughty Oracle

PeopleSoft’s management have called Oracle's US$5.1 billion cash tender offer nothing more than a marketing ploy, while the president & CEO Craig Conway, has deemed it nothing short of bad behaviour.

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By  Matthew Southwell Published  June 7, 2003

Oracle’s plan to commence a cash tender offer for PeopleSoft’s outstanding shares this coming Monday for approximately US$5.1 billion has not impressed everyone. PeopleSoft’s management have given an extremely negative initial response, accusing Oracle of pursuing nothing more than a marketing ploy, while the vendor’s president & CEO Craig Conway, has deemed it nothing short of bad behaviour.

“[This is] atrociously bad behaviour from a company with a history of atrociously bad behaviour. Obviously, it is a transparent attempt to disrupt the acquisition of JD Edwards by PeopleSoft announced earlier this week,” he says.

However, Larry Ellison, chairman & CEO of Oracle, counters that it has been tracking PeopleSoft for some time, since Conway himself reportedly approached Oracle over a possible merger between the two software giants in 2002.

“About a year ago, Craig Conway approached me and Oracle about combining the PeopleSoft application business with the Oracle application business. At that time, about a year ago, we were unable to agree upon a structure. [However,] we have continued follow PeopleSoft very closely,” he says.

Although PeopleSoft and its board of directors is required by law to review all cash tenders regardless of intent, PeopleSoft has advised its shareholders to take no immediate action in light of the Oracle announcement. As such, Oracle has been forced to bypass the vendor’s management and instead focus its efforts on convincing PeopleSoft’s shareholders that the proposed acquisition will be beneficial for both software vendors.

“We think the time is right again to present the PeopleSoft shareholders with an alternative plan, an alternative partnership, to what the management has proposed. That is what we are offering the shareholders,” says Larry Ellison, chairman & CEO of Oracle.

However, rather than presenting PeopleSoft shareholders with just another option, Conway believes that Oracle’s approach is in fact a ringing endorsement of just how important the vendors proposed purchase of JD Edwards is.

“If anyone needed any further validation of the strength of the JD Edwards acquisition, we heard it… from Oracle,” he says.

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