PeopleSoft: Oracle's bid is not enough
Published: 12 Jun 2003 14:38 BST
PeopleSoft has formally rejected Oracle's $5.1bn (about £3.1bn) hostile takeover bid, saying the deal not only raises antitrust issues, but "dramatically undervalues" the company.
Oracle made a hostile takeover bid for PeopleSoft just days after PeopleSoft itself had announced plans to acquire J.D. Edwards for $1.7bn. The deal surprised many, since it offered only a scant premium on PeopleSoft's existing stock price and there was no evidence that Oracle chief executive Larry Ellison had attempted to contact PeopleSoft's board beforehand to discuss the matter privately.
Both PeopleSoft and Oracle make software used by corporations to handle back-office tasks in areas such as human resources, and both compete with German software maker SAP, which holds the No. 1 position in that marketplace. Oracle has said it will not continue marketing PeopleSoft's products if the deal succeeds, leading analysts and others to describe the bid as an attempt to drive a rival out of business, even if the sale doesn't go through.
"Oracle's offer seeks to enrich Oracle at the expense of PeopleSoft's stockholders, customers, and employees," PeopleSoft chief executive Craig Conway said in a release. "We believe that Oracle's proposed acquisition of PeopleSoft would stifle competition and limit customer choice. PeopleSoft remains steadfastly focused on providing customers with superior products and services, and we will not let Oracle's tactics interfere with our business."
PeopleSoft's board of directors voted unanimously to recommend that stockholders reject the offer and reaffirmed its commitment to the J.D. Edwards deal. On Wednesday, PeopleSoft filed notice with the Federal Trade Commission and the Justice Department of its plans to acquire J.D. Edwards.
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