Oracle Wednesday raised its bid for PeopleSoft from $5.1
billion to $6.3 billion, significantly sweetening the offer in what has become an escalating takeover/merger struggle among three enterprise application companies.
The database giant also fired back at lawsuits from PeopleSoft and its intended merger partner before Oracle’s bid, J.D. Edwards
, by saying it intends to file a suit against the companies.
Redwood Shores, Calif.’s Oracle made a cash tender offer to purchase all of
the outstanding shares of Pleasanton, Calif.’s PeopleSoft to $19.50 per
share, up $3.50 per share from the original offer of $16 made June 6.
The move is the latest in a fierce battle pitting PeopleSoft and Denver’s
J.D. Edwards — two enterprise application vendors and merger hopefuls —
and Oracle, who launched its own hostile bid for PeopleSoft days after
PeopleSoft and J.D. Edwards announced their intentions to merge. A competing
maker of business applications, Oracle is looking to stave off that merger.
Jeff Henley, Oracle Executive Vice President and CFO, said the sweetened deal, a 29 percent premium to PeopleSoft’s stock price before his company’s June 6 offer, was
decided upon after speaking to PeopleSoft shareholders about what they felt
was a fair offer.
Oracle Executive Vice President Chuck Phillips moved to clear up any misconceptions on a conference call Wednesday.
“We are extending the support period for PeopleSoft products,” said Phillips. “Contrary to numerous reports in the press, we do not plan to eliminate support for PeopleSoft products — period. PeopleSoft customers will not be forced to migrate to Oracle applications — period. Instead, when and if these customers elect to migrate to Oracle’s eBusiness Suite, they will receive a free license upgrade for like modules.”
Peopleoft responded to the revised offer by advising shareholders not to act, noting that its board of directors will meet to discuss Oracle’s new tender offer.
Oracle’s reaffirmation of its intent was supported in the industry.
Ken Marlin, managing partner at high-tech investment consulting firm Marlin & Associates, said the bid increase solidifies Oracle’s intent as serious.
“Absolutely, I think it’s attractive,” Marlin told internetnews.com. “They’ve [Oracle] been serious from the begining. Pundits have speculated somehow that he [Ellison] was not, but this has always made fabulous strategic sense for Oracle. I think that Ellison’s opening bid was a reasonable place to start. He signaled from the beginning that he tried to have discussions with PeopleSoft and negotiate in good faith to remove the poison pill. This new bid values the company at 3 times its current revenue. That’s a healthy price for a company whose revenue growth is not what it once was.”
Marlin said all industry eyes are now on PeopleSoft. “This puts pressure on PeopleSoft’s board to exercise fiduciary reponsibility to the shareholders. This is a classic case of where we’ll find out whose interests the board is trying to protect. I think the probability is very high that if PeopleSoft spurns Oracle, and goes ahead with its J.D. Edwards merger, you’ll see a drop in their purchase price. There is some danger that PeopleSoft’s stock price will drop below Oracle’s original bid of $16 — and then you’ll see some lawsuits.”
Forrester Research analyst Paul Hamerman agreed the bid increase shows that Oracle is serious. However, he still believes that if PeopleSoft’s board takes the offer to shareholders and they approve the offer, the deal could be tied up by regulatory issues for months.
“Oracle still gains if this runs into regulatory issues,” Hamerman told internetnews.com. “Even if they’re not successful, they will have disrupted PeopleSoft’s sales cycle and left a dark cloud over that company. This just gets uglier by the minute and there will be more lawsuits.”
Also, in its response to lawsuits by both PeopleSoft and J.D. Edwards over the hostile bid, Oracle also said it will file suit Wednesday in a Delaware court against PeopleSoft, its board of directors, and J.D. Edwards “in response to their collective efforts to eliminate PeopleSoft shareholders’ ability to accept Oracle’s tender offer.”
Oracle said it is filing the suit because it claims PeopleSoft and its board failed to act in the best interest of PeopleSoft’s shareholders. Oracle will ask
that the amended J.D. Edwards merger agreement with PeopleSoft be cancelled,
and that PeopleSoft’s “poison pill” be removed.
Oracle’s maneuvers follow two weeks of lunge and parry, which started when
PeopleSoft announced a definitive merger with J.D. Edwards June 2, leading
up to Monday, when PeopleSoft and J.D. Edwards improved
their deal for shareholders and are looking to speed up their plan.
Meanwhile, PeopleSoft is scheduled to launch an advertising campaign Wednesday, according to the Wall Street Journal, which said that it will feature customers supporting PeopleSoft and bashing Oracle for its takeover bid in newspaper ads.
Ethics and Artificial Intelligence: Driving Greater Equality
FEATURE | By James Maguire,
December 16, 2020
AI vs. Machine Learning vs. Deep Learning
FEATURE | By Cynthia Harvey,
December 11, 2020
Huawei’s AI Update: Things Are Moving Faster Than We Think
FEATURE | By Rob Enderle,
December 04, 2020
Keeping Machine Learning Algorithms Honest in the ‘Ethics-First’ Era
ARTIFICIAL INTELLIGENCE | By Guest Author,
November 18, 2020
Key Trends in Chatbots and RPA
FEATURE | By Guest Author,
November 10, 2020
FEATURE | By Samuel Greengard,
November 05, 2020
ARTIFICIAL INTELLIGENCE | By Guest Author,
November 02, 2020
How Intel’s Work With Autonomous Cars Could Redefine General Purpose AI
ARTIFICIAL INTELLIGENCE | By Rob Enderle,
October 29, 2020
Dell Technologies World: Weaving Together Human And Machine Interaction For AI And Robotics
ARTIFICIAL INTELLIGENCE | By Rob Enderle,
October 23, 2020
The Super Moderator, or How IBM Project Debater Could Save Social Media
FEATURE | By Rob Enderle,
October 16, 2020
FEATURE | By Cynthia Harvey,
October 07, 2020
ARTIFICIAL INTELLIGENCE | By Guest Author,
October 05, 2020
CIOs Discuss the Promise of AI and Data Science
FEATURE | By Guest Author,
September 25, 2020
Microsoft Is Building An AI Product That Could Predict The Future
FEATURE | By Rob Enderle,
September 25, 2020
Top 10 Machine Learning Companies 2021
FEATURE | By Cynthia Harvey,
September 22, 2020
NVIDIA and ARM: Massively Changing The AI Landscape
ARTIFICIAL INTELLIGENCE | By Rob Enderle,
September 18, 2020
Continuous Intelligence: Expert Discussion [Video and Podcast]
ARTIFICIAL INTELLIGENCE | By James Maguire,
September 14, 2020
Artificial Intelligence: Governance and Ethics [Video]
ARTIFICIAL INTELLIGENCE | By James Maguire,
September 13, 2020
IBM Watson At The US Open: Showcasing The Power Of A Mature Enterprise-Class AI
FEATURE | By Rob Enderle,
September 11, 2020
Artificial Intelligence: Perception vs. Reality
FEATURE | By James Maguire,
September 09, 2020
Datamation is the leading industry resource for B2B data professionals and technology buyers. Datamation's focus is on providing insight into the latest trends and innovation in AI, data security, big data, and more, along with in-depth product recommendations and comparisons. More than 1.7M users gain insight and guidance from Datamation every year.
Advertise with TechnologyAdvice on Datamation and our other data and technology-focused platforms.
Advertise with Us
Property of TechnologyAdvice.
© 2025 TechnologyAdvice. All Rights Reserved
Advertiser Disclosure: Some of the products that appear on this
site are from companies from which TechnologyAdvice receives
compensation. This compensation may impact how and where products
appear on this site including, for example, the order in which
they appear. TechnologyAdvice does not include all companies
or all types of products available in the marketplace.