Oracle CFO Jeff Henley said in a statement: Our revised offer reflects changes in market conditions and in PeopleSoft’s market valuation. Our new offer represents a premium of 21% over PeopleSoft’s closing price today of $17.30.
He said that the premium is greater than the premium of the previous offer, which was an 18.8% premium to the previous day’s closing price when it was announced in February, when Henley described the $9.4bn bid as Oracle’s final offer.
PeopleSoft pointed out in a statement that its board has rejected all of Oracle’s previous offers, including the higher one. The company believes the bid will run foul of antitrust regulations. Its board will meet this month to consider the new offer.
PeopleSoft’s share price has dropped to a level where Oracle can afford to lower its offer come about at least in part by the very fact that the offer exists. PeopleSoft management complained last month that fending off the bid was distracting.
PeopleSoft on April 22 said it missed its first-quarter Wall Street estimates, as a few deals were delayed until the second quarter. CEO Craig Conway complained that the Oracle fight meant that management still don’t have full use of both arms.
The company’s shares, having peaked at about $24 at the start of the year, have dropped from about $19 on the day of the disappointing earnings report to yesterday’s close of $17.30. Conway expects a flood of new business once Oracle’s shadow has gone.
Oracle said yesterday that 7,906,545 PeopleSoft shares have been tendered and not revoked as a result of its offer. That’s about 2.1% of PeopleSoft’s shares outstanding, down from about 3.3% last December.
Oracle still faces considerable regulatory hurdles in the US and Europe before it will be permitted to go ahead with the offer. Its court fight with the US Department of Justice is scheduled for June. The offer is now set to expire July 16.
