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Oracle Corp. early Wednesday declared that it had won control of PeopleSoft Inc. after stockholders tendered about 75 percent of the outstanding shares of the Pleasanton, Calif. producer of enterprise application software.

Oracle made the announcement after the initial offering period for Oracle’s $26.50 tender offer for all PeopleSoft shares expired at midnight EST Tuesday. During this period Oracle accepted for payment nearly 300 million PeopleSoft shares.

As proof that the company has assumed control, Oracle has designated four representatives to join the PeopleSoft board of directors to give it a majority of board votes.

The new board members replace others who have resigned, including PeopleSoft founder and CEO David Duffield, who departed effective Dec. 21. Two incumbent PeopleSoft board members will remain in place until Oracle completes the merger transition.

Oracle CEO Larry Ellison said the merger transition has already been proceeding smoothly. “We are moving forward quickly with the integration planning process and have been pleased by the level of coordination as we combine the two organizations,” Ellison said in a prepared statement.

“The combination of these two companies bring together some of the best products and people in the enterprise applications market, all for the benefit of the customer.”

Click here to read about how Oracle plans to carry out the early stages of the merger transition.

Oracle is assuming control just two weeks after it reached an agreement with the PeopleSoft board to buy the company for $26.50 per share for total of $10.3 billion. But the two companies had to struggle through 18 months of acrimonious legal maneuvers before they were able to come to terms.

Until then it looked as though the two companies would remained deadlocked until a Delaware court decided whether PeopleSoft’s “poison pill” shareholder rights provisions should legally be revoked, or until PeopleSoft shareholders got another chance in the spring to vote on an Oracle-nominated slate of directors committed to accepting a buyout. PeopleSoft shareholders rejected an Oracle-nominated slate of directors in a spring 2004 proxy vote.

But movement toward an agreement started to gain momentum when Oracle announced on Nov. 19 that the holders of more than 60 percent of PeopleSoft’s outstanding shares accepted what Oracle called its “final and best offer” of $24 per share. At that time, PeopleSoft’s board vowed to keep resisting a buyout.

In early December, top Oracle executives, including CEO Larry Ellison, publicly committed to introducing the next versions of PeopleSoft and J.D. Edwards ERP (enterprise resource planning) software applications. These were the clearest public statements that Oracle executives had made since first declaring their intention to buy PeopleSoft in June 2003 that the PeopleSoft products would have a definite upgrade path.

A few days after voicing this commitment, a PeopleSoft envoy contacted Oracle and indicated that the company would accept a bid of $26.50. The two companies announced a buyout agreement on Dec. 13.

PeopleSoft shareholders who haven’t offered their shares for sale still have time to do so. Oracle said a new offering period started Wednesday and will continue until 8 p.m. EST on Tuesday, Jan. 4, 2005.

Oracle’s stock acquisition subsidiary, Pepper Acquisition Corp., will accept and promptly pay for all shares that stockholders present during this new offering period, Oracle officials said. Pepper Acquisition can also extend this new offering period if necessary to obtain the remaining outstanding shares.

Oracle said it would proceed to the second step of the merger process if it receives tender offers for at least 90 percent of the remaining PeopleSoft Shares.

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