Oracle poised to pounce on PeopleSoft

By Michael Liedtke
Associated Press

SAN FRANCISCO — Bolstered by investors, Oracle Corp. appears destined to complete its long-sought takeover of PeopleSoft Inc. unless its rival becomes more profitable and proves it is worth more than the $9.2 billion bid currently on the table.

The owners of about 61 percent of PeopleSoft's stock implicitly endorsed Oracle's latest $24-per-share offer by tendering their shares before a pivotal weekend deadline. Had most of the shareholders followed the advice of PeopleSoft's board and withheld their shares, Redwood Shores, Calif.-based Oracle planned to rescind its all-cash offer and end a 17 1/2-month quest.

Despite the shareholder rebuff, PeopleSoft isn't ready to surrender because its board believes the business software maker is worth at least $2 per share — nearly $800 million — more than the current offer.

On Saturday, PeopleSoft's board of directors again unanimously concluded that Oracle's latest bid was inadequate, continuing to insist that most of the company's largest stockholders don't think the offer reflects the company's real value.

It marked the sixth time that PeopleSoft's seven directors have snubbed its bitter rival since the takeover battle began. Unless Oracle raises its offer, PeopleSoft's board has signaled it is ready to fight until shareholders take a more definitive vote on the bid at the company's annual meeting next spring.

Despite the continuing impasse, investors still seem to expect the deal to get done. PeopleSoft's shares gained 19 cents yesterday to close at $23.36 on the Nasdaq Stock Market, where Oracle's shares fell 7 cents to close at $12.68.

Pleasanton, Calif.-based PeopleSoft can still hold out because it remains armed with an anti-takeover measure known as a "poison pill" to thwart Oracle's advances.

If Oracle acquires a 20 percent stake in PeopleSoft, the company can trigger the poison pill to flood the market with new shares to make a takeover prohibitively expensive.