Oracle receives tender offers for more than 60 percent of the outstanding PeopleSoft shares and calls for talks this weekend to reach a formal buyout agreement.Oracle Corp. early Saturday morning sent a letter to the PeopleSoft Inc. Board of Directors disclosing that it received tender offers for more than 60 per cent of PeopleSoft's outstanding shares by the midnight Friday deadline.
The letter called on PeopleSoft to remove the poison pill provisions blocking its hostile takeover and to schedule a meeting at its earliest convenience "to finalize a definitive merger agreement at $24.00 per share with the goal of announcing a deal prior to market open on Monday, November 22, 2004." To follow up with this news announcement, Oracle officials said they were sending a draft acquisition agreement to PeopleSoft's attorneys.
Oracle is "prepared to complete and pay for the acquisition of all outstanding shares of PeopleSoft" once PeopleSoft removes the poison pill, which would flood the market with additional shares and a customer protection plan that would two to five times their licensing charges if another company buys out PeopleSoft and then stops supporting or upgrading the products.
Oracle officials issued a statement saying that the 60 per cent majority gave it a "mandate" to acquire PeopleSoft for its $9.2 billion all cash offer.
"The owners of PeopleSoft have spoken and have overwhelmingly chosen to sell to Oracle at $24.00 per share," said Oracle's Chief Executive Officer, Larry Ellison. "We are prepared to enter into a definitive merger agreement as early as this weekend," he said.
Regardless of Oracle's eventual takeover of its rival, eWEEK.com's Lisa Vaas says Oracle has a more important task: repairing its relations with channel partners and customers.
Oracle also announced that it was extending what it had consistently called its "best and final offer" offer until 6 p.m. EST on Dec. 31, 2004.
"We believe the combination of Oracle and PeopleSoft is compelling, the Oracle letter said. The "joint company will have a larger combined customer base, expanded brand reach, critical mass in more industries, and be able to provide substantially better global support," it stated.
The combined company, Oracle contends, "will be more competitive" against software industry arch rivals SAP AG, Microsoft Corp. and a "wave of new outsourcing competitors."
Oracle contends the offer is "Fair" and "represents a substantial premium to PeopleSoft's true historical trading multiples."
The news that more than 60 percent of shareholders want to sell out to PeopleSoft means that the company will be unable to legally resist the will of a majority its shareholders.
Oracle has sued in the Delaware Chancery Court seeking an order to nullify the poison pill and customer protection plan. Since a majority shareholders support the buyout it makes it more likely that the court could nullify the anti-buyout measures if PeopleSoft refuses to do it voluntarily and come to terms with Oracle.
Oracle served notice at the end of October that its $24 dollar per share bid was it's "best and final" offer for its rival producer of ERP (enterprise resource planning) software.
Since Oracle announced its supposed final offer three weeks ago, both companies have engaged in a noisy public relations campaign to win over shareholders. Both companies released letters on Thursday seeking to try to influence shareholder opinion.
Oracle Chairman Jeff Henley released a letter asking shareholders to consider that the $24 per share offer is higher than PeopleSoft's 52-week closing price. PeopleSoft Chairman Dave Duffield issued a letter defending stock sales.
Oracle launched its hostile buyout bid on June 6, 2003 shortly after PeopleSoft announced that it was buying out another ERP software vendor, J.D. Edwards & Co. Since then both companies were locked in persistent legal maneuvers trying to prevail in the costly and wearing proxy fight.
Oracle prevailed after PeopleSoft lost out in a string of lawsuits and regulatory decisions in the U.S. and Europe. The U.S. Justice Department blocked the Oracle buyout on the grounds that it violated antitrust law. But a U.S. District Court decision in September overturned that finding. The Justice Department declined to appeal the court decision.
In late October the European Commission declared that an Oracle buyout would not violated antitrust law in the European Union nations.
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