Oracle boosts bid for PeopleSoft
SAN FRANCISCO — Oracle Corp. sweetened its hostile bid for rival business software maker PeopleSoft Inc. to $9.2 billion Monday, a 14 percent increase aimed at resolving the long-running takeover battle between the bitter foes.
The new all-cash bid of $24 per share raises the stakes from $21 per share — an offer that Pleasanton-based PeopleSoft rejected as inadequate in May. It marked the fourth time that Redwood Shores-based Oracle has revised its bid since it began its attempt to buy PeopleSoft nearly 17 months ago.
Oracle described its latest bid as its “best and final offer,” setting the stage for the climactic scenes in a Silicon Valley soap opera that has featured courtroom confrontations and catty remarks.
The company punctuated its take-it-or-leave-it ultimatum with a promise to abandon the takeover attempt if a majority of PeopleSoft’s shareholders hasn’t accepted the new offer by a midnight EST Nov. 19 deadline.
“We think the time has come for the stockholders of PeopleSoft to decide the outcome,” Oracle Chairman Jeff Henley said during a Monday conference call with analysts.
In a statement issued Monday, PeopleSoft’s board advised the company’s shareholders to take no action until the directors reviewed Oracle’s latest offer “in due course.” The board’s statement noted that in February it rejected an Oracle offer of $26 per share — the highest bid made since the stand-off began.
Through last week, Oracle said only 20.2 million PeopleSoft shares — about 5 percent of the outstanding stock — had accepted the $21-per-share offer.
The latest bid represents a 59 percent premium above PeopleSoft’s stock price before Oracle first launched its bid in June 2003.
PeopleSoft’s shares gained $2.16 Monday to close at $22.93 on the Nasdaq Stock Market, where’s Oracle’s shares rose 9 cents to close at $12.75.
It makes sense for Oracle to draw a line in the sand because the ordeal has become a distraction for both companies, said AMR Research analyst Bruce Richardson.
Meta Group analyst David Yockelson said the strategy also gives Oracle a graceful way to bow out if PeopleSoft rebuffs the bid yet again. “It’s really the best of both worlds for Oracle,” Yockelson said. “Either they can complete the acquisition at a slight premium to what they would have paid a week ago or they can walk away honorably.”
The momentum in the takeover struggle shifted in Oracle’s favor in early September when a federal judge rejected a U.S. Justice Department lawsuit that sought to block the proposed combination on antitrust grounds.
Europe antitrust regulators provided Oracle another boost last week by dropping their objection between two of the world’s three largest makers of business applications software — the computer coding that automates a wide range of administrative tasks.
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