Oracle ups its final offer for PeopleSoft

2 Nov 2004

Oracle has increased the price of its fully financed cash offer from US$21 to US$24 per share, which it says represents its best and final offer for the business software player in its long-running takeover battle.

The news follows the EU’s decision to grant assent to the proposed merger, following a court battle in the US to ensure that the merger wasn’t considered anti-competitive.

This price represents a significant premium to recent trading prices and is in excess of the 52-week closing price high for PeopleSoft shares. “The increased offer price is nearly 60pc higher than the closing price on the day prior to Oracle’s announcement of its intention to commence the original offer,” Oracle said in a statement last night.

Oracle also moved to eliminate most of the conditions from its offer in order to boost shareholder interest at PeopleSoft, which in recent weeks moved to sack its CEO over his handling of the merger that a strong contingent of board members are seeking to block.

“The principal remaining conditions will be that a majority of PeopleSoft’s shares are tendered in the offer and that the PeopleSoft Board of Directors eliminates the poison pill and Delaware law (Section 203) obstacles to Oracle’s acquisition of shares in the offer,” Oracle said.

In a statement last night the company continued: “The amended offer will expire at midnight Eastern Standard Time on Friday, 19 November, 2004. If a majority of PeopleSoft’s shares have been tendered into the offer and the Board of Directors of PeopleSoft has not removed the poison pill and Section 203 obstacles, then Oracle will look to the Delaware Chancery Court to take appropriate action. If by midnight 19 November a majority of PeopleSoft’s shares have not been tendered into the offer, then Oracle will withdraw its tender offer.

“Our best and final offer is US$24 per share, which we believe represents a substantial premium to the price at which those shares would trade were it not for Oracle’s offer,” said Jeffrey Henley, chairman of the board of Oracle. “We will withdraw our offer unless a majority of PeopleSoft shares are tendered into our offer by November 19, 2004.”

By John Kennedy