PeopleSoft look set to rebuff Oracle's "final" offer
PeopleSoft look set to rebuff Oracle's "final" offer
Nov 02, 2004: Thoughts that the PeopleSoft board may be more willing to approve Oracle's takeover bid following the removal of former CEO Craig Conway - who was vehemently opposed to the move - look somewhat wide of the mark, after the PeopleSoft board advised its shareholders to take no action following Oracle's improved and "final" cash offer for PeopleSoft shares.
The announcement was made by the board in response to a letter sent by Oracle to the board outlining that it was to increase its cash offer from $21 to $24 a share. Oracle chairman Jeffrey O. Henley said in the letter that Oracle would "withdraw our offer unless a majority of PeopleSoft shares are tendered into our offer by November 19, 2004."
In their response, PeopleSoft's board said they would meet to review the amended tender offer and make its recommendation to PeopleSoft shareholders in due course.
But the response went on to note that when Oracle previously tendered an offer of $26 a share, the board concluded that the bid undervalued the company, so it seems unlikely that having stated this in its latest response that it will give its approval for shareholders to accept the offer.
Of course, shareholders do not need to approval of PeopleSoft's board to divest their shares, but PeopleSoft's "poison pill" remains in place, which would dilute the value of shares in the company in the event of a takeover and make the acquisition significantly more expensive for Oracle to complete. Should, however, Oracle secure the majority of shares it needs by the Nov 19 deadline, it has stated that it will look to the courts to remove what it claims is an unfair and unlawful obstacle.
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