Enterprise software maker PeopleSoft has today rejected a US$5.1bn hostile takeover by Oracle Corporation, after PeopleSoft boss Craig Conway earlier described Oracle’s offer as “atrociously bad behaviour from a company with a history of atrociously bad behaviour. Otherwise, it is a transparent attempt to disrupt the acquisition of JD Edwards by PeopleSoft”.
Today the company rejected the offer saying that it raises significant anti-trust issues and “dramatically undervalues the company.”
Last week Oracle announced that it will commence a cash tender offer to purchase all the outstanding shares of PeopleSoft Inc for US$16 a share, or US$5.1bn. Earlier last week, PeopleSoft revealed its intentions to acquire competitor JD Edwards in an all-share deal worth US$1.7bn, resulting in a combined entity with revenues of US$2.8bn, 13,000 employees and more than 11,000 customers in 150 countries and 20 industry sectors worldwide.
In response to the Oracle offer, Craig Conway said that PeopleSoft had gained marketshare against Oracle over the past few years in the enterprise software market and its decision to acquire JD Edwards was lauded by customers, shareholders and analysts. He said that if anything, the Oracle offer validated the strength of the proposed acquisition of JD Edwards by PeopleSoft.
In a statement rejecting the Oracle offer, Conway said: “Oracle’s offer seeks to enrich Oracle at the expense of PeopleSoft’s stockholders, customers and employees. We believe that Oracle’s proposed acquisition of PeopleSoft would stifle competition and limit customer choice, PeopleSoft remains steadfastly focused on providing customers with superior products and services and we will not let Oracle’s tactics interfere with our business,” Conway stated.
PeopleSoft’s board of directors voted unaminously to reject the Oracle offer and reaffirmed its commitment to the JD Edwards deal, the company said.
By John Kennedy