Oracle’s PeopleSoft bid to expire on July 7

Oracle’s hostile takeover bid for PeopleSoft will expire July 7, according to the formal offer filed today with America’s Securities and Exchange Commission. However, the vendor is expected to extend the offer.

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By  Matthew Southwell Published  June 9, 2003

Oracle’s hostile takeover bid for PeopleSoft will expire July 7, according to the formal offer filed today with America’s Securities and Exchange Commission. However, the vendor is expected to extend the offer.

The filing also requires PeopleSoft's board of directors to invalidate their ‘poison pill,’ a move designed to make a stock less attractive to a prospective buyer, in order for it to go forward.

The cash tender offer of US$16 per share, or approximately $5.1 billion, was announced by Oracle on Friday. It came just days after PeopleSoft unveiled plans to acquire JD Edwards for approximately US$1.7 billion in stock.

While Oracle says it is pursuing PeopleSoft to make itself more profitable, other have seen the bid as a ploy to derail PeopleSoft’s acquisition of JD Edwards. For instance, Craig Conway, president & CEO of PeopleSoft said the move was “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,” he added.

However, Larry Ellison, chairman & CEO of Oracle, has countered this argument, saying that Oracle had been tracking PeopleSoft for some time and 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,” said Ellison.

This claim is borne out in today’s filing, which states that on June 5, 2002 Oracle and PeopleSoft entered into negotiations at PeopleSoft’s bequest “concerning the possibility of combining the applications businesses of the two companies.”

It goes on to say that while the discussion was “"general in nature” and no valuation was discussed, the companies concluded that they couldn’t come to a mutually agreeable decision and the matter was dropped.

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