During an investor briefing in which it shared its financial plan and issued what is considered optimistic guidance to the end of 2005, PeopleSoft said it had enlisted Innisfree M&A Inc to solicit proxies from shareholders in support of its own slate of directors.
The action indicates that PeopleSoft believes Oracle might try to nominate its own slate of directors in preparation for the PeopleSoft AGM. This could be held at any point from next March if the would-be buyer does not get the support of a majority of shareholders on November 19 when its current bid is due to expire. PeopleSoft’s shareholder meeting might be held as early as March.
In the early days of the 18-month old tussle Oracle was preparing to pack the board with bid-friendly members but did not follow the action through. One reason may have been because the US and European antitrust investigations were underway and if they had blocked the bid even a slate of Oracle insiders would not have made a difference. The situation is different now that both bodies have cleared the potential takeover. There is also the issue of the $90 million Oracle has spent on the bid so far and a question over whether it would really walk away with PeopleSoft appearing to be of the opinion that it will not.
Oracle said it would withdraw if shareholders don’t tender at least 50% of PeopleSoft’s shares by midnight November 19. If it does hit the number, it plans to ask PeopleSoft to lift its poison pill takeover defense, and if that request is rebuffed will continue with its lawsuit in which it is seeking to invalidate PeopleSoft’s anti-takeover provisions. If the court case fails, it could try to replace PeopleSoft’s board through a proxy battle. A list of nominees would be required by the end of November.
PeopleSoft is maintaining its hard stance, and there are signs that it will seek to remain independent regardless of the November 19 outcome, with CFO Kevin Parker calling the tender offer a non-binding straw poll.
