Oracle Reaffirms Interest in PeopleSoft

Oracle bumps up the deadline date for its $19.50 per share tender offer for PeopleSoft; meanwhile, PeopleSoft's bid to get the public full access to potentially damning Oracle e-mails is quashed.
Posted September 5, 2003

Clint Boulton

Hours after PeopleSoft conducted a meeting with financial analysts to discuss its plans for absorbing J.D. Edwards , Oracle Thursday reiterated its interest in acquiring PeopleSoft for $7.5 billion and extended its tender offer of $19.50 per share to October 17.

The bid marks the second time in as many months that the Redwood Shores, Calif. software maker, eager to stifle competition in the enterprise applications space where PeopleSoft sits No. 2 behind German giant SAP, extended its offer. The tender offer was previously set to expire September 19 at midnight.

As of the close of trading on Thursday, approximately 38.7 million shares had been tendered in and not withdrawn from the offer.

"PeopleSoft's plan means confusion and execution risk for customers and shareholders," said Jim Finn, Oracle spokesperson. "Oracle believes that its fully-financed, all cash offer for PeopleSoft represents the better plan for PeopleSoft shareholders and customers. We remain fully committed to our offer and are today announcing an extension of the offer through October 17, 2003."

Oracle, at war with PeopleSoft in a hostile bid to buy the Pleasanton, Calif. rival since early June, hasn't backed down a bit since announcing its intentions. But the company has faced opposition from a defiant PeopleSoft from the get-go, and the specter of antitrust investigations from the Department of Justice looms.

In related news, PeopleSoft, which Thursday authorized a stock repurchase program for up to $350 million of its stock, was thwarted in its attempts to unseal e-mails that are potentially damning to Oracle's position. PeopleSoft had asked the court to get Oracle employee e-mails unsealed for the public. But Thursday Alameda County Superior Court Judge Ronald Sabraw shot down the informal request.

In late August, PeopleSoft yielded what it believed was evidence to support its complaints that suggest Oracle was aware of just how the company's actions were hurting PeopleSoft, offering e-mail excerpts to the public. But Oracle disputed the presentation of the e-mails, with spokesman Finn noting that they were excerpts taken out of context.

For example, PeopleSoft quoted Oracle Executive Vice President Safra Catz as writing that Oracle would not continue support for PeopleSoft products. Finn took issue with this.

Finn said the email, " a good example of PeopleSoft's attempt to take a single sentence fragment from a lengthy document out of context and try to turn it into something salacious."

What this adds up to, legal experts have said, is a he-said, she-said game where each company is attempting to persuade Sabraw that the other is engaging in misconduct. Outside the court, lawyers said, the DOJ is waiting in the wings to see if any evidence of anticompetitive practices come to light, particularly on the part of Oracle.

Sabraw's decision is an example of the balance that is being struck in the case to let each company make their argument.

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