Oracle believes that the $9.4bn price tag it is putting on the company will prove impossible for PeopleSoft shareholders to resist in the run-up to its crucial annual meeting next month.
In an initial reaction, PeopleSoft advised stockholders to take no action and said its board of directors will meet to consider the offer and make a recommendation. Both of Oracle’s previous low-ball offers were rejected by the board in unanimous decisions.
This is our final price, said Oracle CFO Jeff Henley. He also urged PeopleSoft’s shareholders to back Oracle’s proposal to expand the PeopleSoft board from eight to nine people, so that its own slate of five nominees can take the majority.
Oracle made its original $16 a share bid for PeopleSoft in June last year, raising it a few weeks later to $19.50. But that offer has long looked dead in the water, with PeopleSoft shares trading comfortably higher.
Oracle has now extended the offer for PeopleSoft stock from Friday February 13 to Friday March 12. While the offer is not subject to due diligence or financing, Oracle wants PeopleSoft’s ‘poison bill’ abandoned.
PeopleSoft’s lukewarm view of prospects for its current first quarter is a further cause for glee in the Oracle camp. Henley said that if the deal goes ahead, it would result in substantial cost savings, be accretive in the first year excluding amortization of intangibles and involve minimal business integration risk.
CEO Larry Ellison added that he believes that the acquisition would be pro-competitive, would benefit the customers of both companies and would make Oracle an even more profitable company.
Huge regulatory hurdles on both sides of the Atlantic lie ahead for Oracle, and it expects a verdict on anti-trust approval from the US Department of Justice before the March 12 offer deadline. A decision from the European Commission may take longer.
Oracle reminded those who want to vote their shares in the March 25 PeopleSoft meeting that they must be bought in the open market by today, February 5, and that shareholders must check their stock is not out on loan by their bank or brokerage.
This article is based on material originally published by ComputerWire
