Oracle targets PeopleSoft shareholders as bid fails

2 July 2003
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03 July 2003 | Robin Parker

Software giant Oracle is aggressively targeting PeopleSoft's shareholders after its board rejected a second takeover bid.

Oracle upped its offer for PeopleSoft by more than 20 per cent to $6.3 billion last month.

Craig Conway, PeopleSoft's chief executive, threw out the bid and speeded up his company's own plans to buy JD Edwards.

PeopleSoft will now pay half of the agreed $1.7 billion purchase price in cash, and could seal the deal a month earlier than originally planned - or sooner.

Unless Oracle can sway PeopleSoft, it will have to revise its offer to cover the purchase and integration of JD Edwards.

The battle for second place in the enterprise resource planning software market began a month ago, when Oracle reacted to PeopleSoft and JD Edwards' plans with its first takeover bid.

JD Edwards is also seeking $1.7 billion in compensation for what it called "tortuous" interference with its proposed merger.

After his address to last week's AppsWorld conference in London, Oracle chief executive Larry Ellison was bullish about winning over shareholders.

"It is interesting that [Conway] won't sell something at any price that he doesn't own, but I believe in majority rule, and this decision should be made by the majority of shareholders."

Asked if he would up his bid, he said: "Never say never."

PeopleSoft's position was backed by the Distributors and Manufacturers User Group, which represents more than 300 users of ERP software.

The group said Oracle's plan for PeopleSoft's customers to migrate to its software would cost manufacturers millions of dollars and disrupt operations.

Ellison said Oracle would keep a team in place to support and improve PeopleSoft products, but it would not "actively market" them to new customers.

Oracle took out an advert in the Financial Times the same day. Its seven-point charter said Oracle would keep producing PeopleSoft products and not force users to convert to Oracle E-Business Suite applications.

SMjul2003

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