Oracle's letter attempts to woo PeopleSoft shareholders
Oracle's letter attempts to woo PeopleSoft shareholders
Oracle has written to all PeopleSoft shareholders to urge them to accept its final tender offer of US$26 per share by the middle of next month and elect Oracle's hand picked nominees to PeopleSoft's board the company's forthcoming board elections.
Oracle is taking its fight directly to the shareholders after having their attempts to purchase the rival enterprise software maker continually rebuffed by the PeopleSoft board over the last eight months.
The letter, which is signed by Oracle CEO Larry Ellison and Chairman Jeff Henley, accuses the PeopleSoft directors of acting in their own interests rather than those of their shareholders.
"The pattern of conduct by (PeopleSoft CEO) Mr. (Craig) Conway and his Board of Directors over the past eight months and their evident lack of concern for stockholder rights have left us with no choice but to take this matter directly to you - the true owners of PeopleSoft," the letter states.
Even if the letter persuades the required number of shareholders to divest their holding to Oracle, the company still faces the likelihood of an objection ruling to the deal from antitrust regulators at the U.S. Department of Justice (DoJ). While the regulators have yet to announce their decision on the proposed takeover, it has already emerged that staff at the DoJ have advised the Assistant Attorney General to block the deal.
Though Oracle's Ellison has stated recently that he would be willing to contest an unfavourable ruling further, should a lengthy legal fight have to take place before the deal is approved, shareholder support would likely ebb away.
Oracle also accuse PeopleSoft's board of feathering their own nests with agreed severance and benefits packages in the event of any takeover, as well as the insistence on a 'poison pill' compensation package clause, which would force whoever takes over PeopleSoft to pay up to US$1.5 billion in compensation to PeopleSoft customers. With the prospect of a successful acquisition slipping away again, following the renewed seed of doubt planted when Oracle upped its offer to $26 a share, it seems that Oracle is now trying to stir up a sense of injustice among PeopleSoft's shareholder community, as it makes its final moves in the almighty struggle to gain control of the rival software maker.
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