Oracle Bumps PeopleSoft Hostile Takeover Bid

November 1, 2004 ( - Raising the stakes in a long-running PeopleSoft takeover fight by 14.3%, Oracle has set a November 19 deadline for what it called it its ``best and final offer."

In the Monday  announcement , Oracle said it was bumping its cash offer to $24 a share from $21 for all common shares of PeopleSoft, which rejected the earlier $7.7-billion offer for being inadequate, according to news reports. Redwood Shores, California-based Oracle pointed out the new offer price is nearly 60% higher than the closing price on the day before its initial June 2003 offer.

As part of the improved offer, Oracle mandated that a majority of PeopleSoft’s shares are tendered in the offer and that the PeopleSoft board eliminate the poison pill antitakeover defense and other “obstacles” to Oracle’s acquisition of shares in the offer.

Oracle’s more generous bid comes less than a week after European antitrust regulators cleared its hostile bid to buy PeopleSoft. The decision by the European Commission removed the last antitrust hurdle that threatened to block Oracle from taking over PeopleSoft.

Also, Oracle executives Friday insisted their proposed PeopleSoft deal makes good business sense. One worry voiced at the company’s annual stockholder meeting was that the two software makers might not make a good marriage, resulting in poor service and a big loss of PeopleSoft’s customers, news reports indicated.

But Oracle Chief Executive Larry Ellison said he was confident the purchase of PeopleSoft would work out fine. If the takeover is accomplished, Ellison said, “it should accelerate our growth all over the world,” especially in North America, where PeopleSoft does much of its business.

For its part, PeopleSoft  advised its stockholders to take no action at this time in response to the latest Oracle bid.

HR professionals have been watching the Oracle-PeopleSoft battle because of the extremely popular HR software from PeopleSoft. Observers say many HR officials would outsource their operations instead of keeping them on the PeopleSoft platform if the takeover goes through.