In a letter from the PeopleSoft board of directors made available yesterday, the company said the JD Edwards deal is strong and financially compelling, while the Oracle offer severely undervalues PeopleSoft and has massive downside risk.
If we had recommended that the offer be accepted, and the transaction was not completed, the damage to stockholder value could be enormous, the board’s letter said, citing antitrust investigations from agencies including the US Department of Justice as a reason the deal could fail.
The board also reiterated its position that Oracle’s ideas about future customer support create serious uncertainty, that will cause customers to reconsider buying. Oracle says its position is clear – it will support and develop PeopleSoft products.
PeopleSoft employees too, could depart in the face of such uncertainty at the company, the board’s letter said (though the current state of the California technology job market could make this argument difficult to support).
An Oracle spokesperson said: This is another attempt to distract attention from the tangible benefits of our offer. Once PeopleSoft customers learn the facts about Oracle’s commitment to them, they will understand that our offer will substantially benefit them.
Since the hostile takeover bid was launched, at least one shareholder lawsuit has been filed against PeopleSoft accusing it of reacting improperly to Oracle’s buyout offer. The company denies any wronging.
In other merger-related news yesterday, Oracle said that the July 16 hearing in its lawsuit against PeopleSoft – which seeks to block PeopleSoft’s poison pill shareholder rights plan – has been postponed following the DoJ’s stepped-up antitrust probe. The firms will meet July 25 to pick a new date.
Source: Computerwire
