A PeopleSoft director, through an attorney, contacted Oracle with the lucky number: $26.50 per share, the price it would take to buy the software maker, Oracle President Chuck Phillips told CNET News.com on Monday.
Until that point, PeopleSoft had, saying the undervalued the company.
"Friday evening, an independent director, through an attorney, reached out to us," Phillips said. "It was the same director that said PeopleSoft would be open to a higher price than $24 and communicated to us the exact number."
The terse communication was the first time the two companies had negotiated directly on share price since Oracle began its hostile takeover bid in June 2003, people close to the deal said.
"This is the first communication we had from a PeopleSoft representative," said Michael Carroll, a partner at Davis, Polk & Wardwell who is representing Oracle.
Some high-profile lawsuits, such as the Microsoft antitrust case brought by the Justice Department, are characterized by the constant buzz of backdoor negotiations that underlie courtroom maneuverings in public.
But the trial taking place in Delaware's Chancery Court ended unceremoniously Monday morning with a brief hearing featuring wisecracks from the presiding judge and holiday season well-wishes from a handful of adversaries turned instant allies.
That legal proceeding will be dropped as a result of the $10.3 billion merger.
The companies settled on the acquisition price andon Monday morning.
Oracle was willing to offer $26.50 a share after reviewing PeopleSoft's financial books and finding that the company's maintenance business was more profitable than had been expected, Oracle executives said on Monday. Oracle had previously stated its bid of $24 a share was its "best and final" offer.
While both sides agreed on a share price, the weekend negotiations between the companies revealed other challenges. As the parties negotiated by phone, PeopleSoft executives pressed for conditions ranging from employee compensation to options and benefits, Phillips said.
PeopleSoft also wanted assurances that a deal could be reached and the merger completed relatively quickly.
PeopleSoft attorney Victor Lewkow, a partner at Cleary, Gottlieb, Steen & Hamilton who specializes in mergers and acquisitions, placed the call to Oracle, Carroll said. Lewkow phoned William Kelly, Carroll's colleague in Davis, Polk's Menlo Park office.
That kicked off a frenzied round of negotiations that stretched over the weekend. Accelerating the process was a nucleus of