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Oracle ups PeopleSoft offer in aggressive takeover bid
Updated 21st November 2004 - Oracle has won over a large number of PeopleSoft shareholders but PeopleSoft has been steadfastly refusing to remove the poison pill that will make the takeover far more costly than it otherwise would be. - Oracle announced today that it has upped its offer in a takeover bid for rival PeopleSoft by $3 per share, valuing the enterprise applications maker at around US$8.8 billion. Based in Redwood Shores, Calif., database giant Oracle called the latest proposal its "best and final offer" and said that it may amend some of the conditions of its existing bid in light of the European Commission's vote to approve the merger last week. Oracle has been locked in an aggressive and bitter fight for control of biggest rival PeopleSoft since it first launched its hostile takeover bid in June 2003 as part of its expansion plan. The current offer placed on the table by Oracle is the latest in a series of progressive increases of its bid, and the bid price has risen by approximately 60 percent over the original $16 per share offered in June 2003. Previously, in February 2004, Oracle raised its bid from $19.50 to $26 a share. Subsequently, in May 2004, the company lowered its bid to $21, blaming a decline in the value of PeopleSoft, which specializes in business software such as enterprise resource planning (ERP) and customer relationship management (CRM) applications. PeopleSoft responded to the latest move by Oracle by issuing a statement, saying that its board would review the new bid and react accordingly. Oracle said the amended offer of $24 per share will expire at midnight on Friday, Nov. 19. At that time, if a majority of PeopleSoft's shares have been tendered into the offer and the company's board of directors has not removed its poison pill measure that guarantees customers a full refund in the event that Peoplesoft is acquired by a hostile takeover, Oracle said it will ask the Delaware Chancery Court to take action in the matter. The Delaware court last month held hearings regarding various issues in PeopleSoft's poison pill provision, including a defense against hostile takeovers in which the pursued company floods the market with shares, thus making itself prohibitively expensive for a potential acquirer. Oracle is arguing to have that defense invalidated. The judge in the case has yet to issue a ruling. In a letter to PeopleSoft's board of directors, Oracle Chairman Jeff Henley and Chief Executive Larry Ellison said the fate of the deal now resides firmly with PeopleSoft's shareholders, as the EU decision to rule in Oracle's favour has removed a major obstacle to the completion of the merger. The U.S. Department of Justice has earlier dropped its anti-trust objections to the merger. More on Oracle More on PeopleSoft |
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