If all other routes fail, Oracle will take its quest to the heart of PeopleSoft by packing the board with acquisition-friendly directors. Oracle chairman Jeff Henley said: We believe that the current board of PeopleSoft is not acting in the best interests of stockholders and that a large majority of those stockholders are in favor of a change. Though a large majority of stockholders have already indicated their desire to sell, the current board appears intent on obstructing the will of the stockholders. We plan to give them a choice.
The Redwood Shores, California-based company has put forward four directors for the seven-member board. If they were all elected, they would be in a position to dismantle PeopleSoft’s anti-takeover measures if the current court case fails.
The four nominees are economist and director of two companies, Duke Bristow; Roger Noall, former senior executive VP of a bank holding company and current director of a separate company; Laurence Paul, managing principal of a private equity investment firm and a company director of an external company; and Artur Raviv, professor of finance at Kellog School of Management, Northwestern University.
In its response to the announcement, PeopleSoft continued to insist that in its opinion and that of its largest stockholders, Oracle’s $24 per share offer substantially undervalues the company. We believe that Oracle has nominated this slate to allow Oracle to purchase PeopleSoft for an inadequate price that does not reflect the Company’s real value, it said.
While 61% of stockholders had tendered their shares by Oracle’s deadline, which Oracle believes gives it a mandate to continue, PeopleSoft disagrees, maintaining that some stockholders tendered despite believing that the $24 price undervalued the company. It is possible that some stockholders tendered their shares even though they thought the valuation was too low as a strategy to keep the offer on the table in the hopes that it would be increased, confident that the PeopleSoft board would not change its recommendation whatever the outcome.
