Oracle lowers PeopleSoft bid
Published: 17 May 2004 08:45 BST
Oracle said late on Friday that it has lowered its bid to acquire PeopleSoft to $21 a share, saying the reduced bid "reflects changes in market conditions."
Oracle's new bid is 21 percent above Friday's $17.30 closing price for PeopleSoft shares, but $5 below the company's prior offer. The new bid lowers the total value of the deal from $9.6bn to $7.7bn.
"Our revised offer reflects changes in market conditions and in PeopleSoft's market valuation," Oracle chairman and CFO Jeff Henley said in a statement. Henley added that the premium is still greater than the one offered when the PeopleSoft bid was first announced. "I believe that this deal will benefit stockholders of both companies," Henley said.
Oracle's bid has already been held up by various regulatory hurdles, including a challenge from US officials. Oracle president Charles Phillips said earlier on Friday that the company hopes to resolve that issue by late summer.
The move comes after Oracle had twice raised the amount it was willing to offer for Oracle shares. In February, Oracle hiked its bid to $26 a share from $19.50. The company originally bid $16 a share for PeopleSoft last June, but improved on that two weeks later.
Last month, PeopleSoft reported earnings that narrowly missed analysts' expectations.
In a statement, PeopleSoft said its board of directors would consider the lowered bid at a regularly scheduled board meeting at the end of the month, but noted that the board had rejected three earlier overtures.
"We note that Oracle has timed this announcement on the eve of our annual Leadership Conference, our most significant customer event for senior executives," the PeopleSoft statement said. "This is one more instance of what we firmly believe is Oracle's ongoing effort to damage our business."
PeopleSoft added that "given the significant antitrust obstacles in both the United States and Europe, we do not believe Oracle's bid can be completed at any price."
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