PeopleSoft board denounces Oracle bid once more

PeopleSoft’s board of directors has recommend that stockholders reject Oracle’s revised unsolicited offer to purchase all PeopleSoft shares.

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By  Matthew Southwell Published  February 10, 2004

PeopleSoft’s board of directors has voted unanimously to recommend that stockholders reject Oracle’s revised unsolicited offer to purchase all PeopleSoft shares for US$26.00 per share. The move, which comes after a thorough review by the PeopleSoft board based on meetings with its financial and legal advisors, plus recommendations from its transaction committee of independent directors, is the latest in a series of announcements designed to prevent company shareholders selling their stock to Oracle as the database giant pursues its hostile takeover bid. According to the PeopleSoft board, the Oracle offer is inadequate and does not reflect the enterprise software vendor’s real value. Such views have been developed in conjunction with Citigroup Global Markets and Goldman, Sachs & Co., while also taking into account the fact that PeopleSoft has met or exceeded its earnings guidance in 16 out of the last 17 quarters. The software vendor also cites the disruptive influence of the ongoing Oracle saga, which it believes has resulted in PeopleSoft trading at the low end of its historical valuation range relative to its forward earnings. “Oracle’s offer does not begin to reflect the company’s real value, including the value we are creating through our successful combination with JD Edwards,” says PeopleSoft’s president & chief executive officer, Craig Conway. “We believe Oracle is using the entire process — tender offer, antitrust and proxy solicitation — in an attempt to damage our company. Don’t underestimate the significant additional value PeopleSoft can create once the disruption from Oracle’s hostile activities has ended,” he adds. In addition to its undervaluing argument, the PeopleSoft board has also taken the opportunity to remind its shareholders that the proposed combination of PeopleSoft and Oracle continues to face regulatory scrutiny in both the United States and Europe. For example, the United States Justice Department, the European Commission and numerous state attorneys general are all investigating the potential ramifications of Oracle’s takeover, should it prove successful. “The board believes that PeopleSoft has a better plan for stockholders,” says Conway.

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