PeopleSoft, J.D. Edwards unite to defend merger
Published: 16 Jun 2003 15:59 BST
PeopleSoft and J.D. Edwards have changed the terms of their $1.7bn merger, speeding up the process and switching from an all-stock deal to a stock-and-cash transaction.
The move is most likely an attempt to fend off database giant Oracle's hostile takeover bid for PeopleSoft, launched a just a few days after the J.D. Edwards merger was announced on 2 June.
The amended plan calls for PeopleSoft to pay $863m in cash and issue 52.6 million shares of its stock in exchange for J.D. Edwards.
J.D. Edwards shareholders will get $7.05 plus 0.42 of a PeopleSoft common share for each J.D. Edwards share. The shareholders will also have the option of taking the original stock deal. The original terms between the two business software makers called for J.D. Edwards shareholders to get 0.86 of a PeopleSoft share for each J.D. Edwards share.
PeopleSoft and J.D. Edwards said the deal is now expected to save the combined companies $150m to $200m on an annual basis starting in 2004. Previously, executives had said the merger would save the combined companies $80m annually within the first full year.
Oracle CEO Larry Ellison had pointed to that earlier savings figure as one reason that shareholders should instead choose his takeover bid, asserting that an Oracle deal would add to the bottom line in the first combined quarter. Oracle's bid has prompted lawsuits from both PeopleSoft and J.D. Edwards.
The amended J.D. Edwards deal should "minimise customer uncertainty," allowing the two companies to speed up their integration plans, the companies said on Monday.
"The amended definitive agreement allows the companies to capture the near-term financial synergies and deliver long-term stockholder value," J.D. Edwards CEO Bob Dutkowsky said in a release.
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