PeopleSoft approved for JD Edwards acquisition

15 Jul 2003

Antitrust regulators in the US Department of Justice have approved the proposed merger of business-software firms PeopleSoft and JD Edwards, clearing the way for the deal to be concluded as early as this week.

Meanwhile Oracle, which is pursuing a hostile takeover of PeopleSoft, has extended the deadline for the tender offer for shares in its target company and has said it still intends to make the acquisition, despite the most recent developments.

The Department of Justice has effectively ruled that PeopleSoft’s exchange offer for JD Edwards is not in breach of US competition laws and has ended the waiting period early. This is now set to expire at midnight EDT time this Thursday, 17 July. Once this deadline has passed, PeopleSoft expects to complete the acquisition, the company said in a statement.

“The Department of Justice’s decision to grant early termination is great news,” said PeopleSoft president and CEO Craig Conway, who has been a vocal opponent of Oracle’s proposed move for his company. “This is a very important milestone and clears the way for the JD Edwards acquisition to be completed.”

Bob Dutkowsky, chairman, president and CEO of JD Edwards also welcomed the decision. “The combined company will offer both mid-sized and large enterprise customers access to the broadest, most open suite of integrated enterprise software applications in the industry,” he said.

In its response to the Department of Justice’s decision, Oracle has stepped up its US $6.3bn cash bid for PeopleSoft and shareholders in the latter company now have until 15 August to tender their shares. The previous deadline was to have been this Friday 18 July and it marks the second time that Oracle has extended the closing date. “We remain fully committed to acquiring PeopleSoft, with or without JD Edwards,” an Oracle spokesman said in a statement.

However Oracle’s bid is also the subject of an antitrust investigation; last week the US Department of Justice made a second request for information from the company as part of a review that may last several months. The investigation is likely to become more complex still if Oracle finds itself in the position of having to buy two companies rather than the one it had originally planned.

By Gordon Smith