PeopleSoft reject Oracle's improved bid
PeopleSoft reject Oracle's improved bid
PeopleSoft's board of directors has unanimously rejected Oracle's revised hostile bid, saying that the increased bid still undervalues the company.
This is despite the fact that Oracle has substantially increased its offer from $19.50 per share to $26, which is significantly above the current trading price of $22.50 (all prices US dollars).
PeopleSoft's board maintain that the current share price belies the true value of the company, and urged its shareholders not to accept it.
"The board believes that PeopleSoft has a better plan for stockholders. Oracle's offer does not begin to reflect the company's real value, including the value we are creating through our successful combination with J.D. Edwards," said PeopleSoft President and CEO, Craig Conway. "We believe Oracle is using the entire process - tender offer, antitrust and proxy solicitation - in an attempt to damage our company. Don't underestimate the significant additional value PeopleSoft can create once the disruption from Oracle's hostile activities has ended."
In a statement, the board also claimed that the fact the company is trading at the low end of its historical valuation range relative to its forward earnings is "largely due to the uncertainty created by Oracle's hostile actions."
The board also said it believes Oracle has tried to manipulate the antitrust process in order to cause delays and uncertainties to damage PeopleSoft's relationships with customers.
"Oracle did not make its initial filing in Europe for more than four months following its offer. Then it failed to fully respond to inquiries from the European Commission, to the point that the EC "stopped the clock," further delaying the day of antitrust reckoning."
Responding to the rejection by PeopleSoft, Oracle said that shareholders can still make the takeover happen by electing Oracle's selection of independent directors to PeopleSoft's board at its upcoming board elections in March.
Even if that does happen, Oracle still has to gain approval form antitrust regulators in the US and Europe. It expects a decision from the US Department of Justice by March 12, but the European Union is not expected to give its decision until April, after it stopped the clock until Oracle submitted requested information which had not been forthcoming in time.
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