Oracle steps closer to PeopleSoft ruling

The software maker meets a Justice Department request for information on its multibillion-dollar bid for PeopleSoft, clearing the way for a ruling on whether the deal is anticompetitive.

Alorie Gilbert Staff Writer, CNET News.com
Alorie Gilbert
writes about software, spy chips and the high-tech workplace.
Alorie Gilbert
2 min read
Oracle has met a U.S. Department of Justice request related to its multibillion-dollar buyout bid for PeopleSoft, clearing the way for a much-anticipated ruling on whether the deal is anticompetitive.

"Earlier this week, we certified our substantial compliance with the Department of Justice's second request for information," Oracle spokeswoman Jennifer Glass said Friday.

The Redwood Shores, Calif.-based software maker began gathering material for the second request for information more than five months ago, when the regulatory agency extended its examination of the proposed $7.25 billion deal. Through its pursuit of PeopleSoft, Oracle seeks to combine the second- and third-largest business applications companies in the world. Germany-based SAP is the biggest.

In the case of a cash tender offer, the Justice Department ordinarily has 10 business days to decide whether to allow a deal to proceed, reject it or require modifications, after a company completes its side of an extended review. However, Oracle may give regulators more time to come to a decision, Glass said. The company plans to come to an agreement with the agency on the timing of the ruling, she said. "If both parties agree, that (10-day deadline) can get extended," Glass said.

Oracle executives said last month that they anticipated that the regulators' decision would come in late December or early January. The software maker is also waiting for an antitrust decision from the European Commission.

Oracle also said on Friday that it has extended the tender offer period for PeopleSoft shares by about six weeks, from Dec. 31 to Feb. 13. It is the sixth extension since Oracle launched the bid, nearly seven months ago.

As of Friday, PeopleSoft shareholders had tendered a total of 12.4 million shares, or about 3 percent of those outstanding, according to Oracle. In October, the number of shares tendered stood at 24.8 million, or about 7 percent of the total outstanding. The numbers tendered have dwindled, as the antitrust review has run on, and as the price of PeopleSoft shares has climbed above Oracle's $19.50-per-share offer. The stock closed at $22.13 on Friday.

"It's pretty clear," said Steve Swasey, a PeopleSoft spokesman. "Our board has said all along that this offer undervalues the company."

An Oracle representative countered that a decline in tendered shares is standard in cases of protracted regulatory review.

Oracle has spent $33.4 million, including a $5 million line of credit, on its effort to acquire PeopleSoft as of Nov. 30, it disclosed in a recent filing with the Securities and Exchange Commission.

In addition to gathering information for regulators, Oracle is working to nominate an alternative slate of directors to PeopleSoft's board. It hopes to fill four of eight seats that are up for election this spring with members friendly to Oracle.

PeopleSoft has spent roughly $25 million fending off the Oracle bid as of Sept. 30, the end of its third quarter, a representative of the Pleasanton, Calif.-based software maker said.

CNET News.com's Dawn Kawamoto contributed to this report.