Oracle vs. PeopleSoft
A war of words and lawsuits.
Questioned during a press briefing at the OracleWorld conference in San Francisco, Oracle Executive Vice President Chuck Phillips told reporters that "it wouldn't make sense" for Oracle to raise its $19.50-per-share offer while awaiting regulatory clearance. The company doesn't expect a decision from the U.S. Department of Justice, which is reviewing the deal, until sometime in October or November. Regulators in the European Union and Canada are also looking at the deal.
The offer price has become the subject of speculation recently as PeopleSoft's stock has climbed over the past week, making Oracle's offer less appetizing to PeopleSoft investors. With Wall Street optimism building over PeopleSoft's merger with J.D. Edwards, PeopleSoft's shares closed at $18.43 Wednesday.
Phillips said he's confident Oracle will clear the antitrust hurdle, and he predicted that cracks in PeopleSoft's merger with J.D. Edwards will eventually begin to show, increasing shareholder support for Oracle's offer in the end. "Time will be on our side," Phillips said, echoing comments made by Oracle Chief Executive Larry Ellison in July.
Oracle's offer is set to expire Oct. 17, but the company has indicated that it's willing to extend it.
Two more major roadblocks await Oracle in its quest to buy PeopleSoft, and Phillips dismissed both of them. One of them is an antibuyout provision known as a "poison pill" put in place by PeopleSoft management. Oracle has filed a lawsuit in an attempt to overturn the provision. Phillips said poison pills rarely stop deals from happening. They are usually a negotiation tool instead of a showstopper, he added.
The other potential roadblock is the "staggered" structure of PeopleSoft's management board, which makes it unlikely that Oracle could replace the current board with an all Oracle-friendly board at PeopleSoft's next board meeting in June. PeopleSoft's board has twice rejected Oracle's bids.
Phillips said Oracle has a few ideas about how to get around that problem, but he said he couldn't discuss them. "We have a few things up our sleeve," he said.