PeopleSoft rebuffs Oracle takeover yet again

Following Oracle increased bid for PeopleSoft from $19.50 per share to $26.00, raising its valuation to around $9.4bn, PeopleSoft’s board has unanimously rejected the revised offer. The continuing saga, now in its ninth month, still attracts speculation and commentary, most of it desultory in large part due to its long running nature. For the record, Oracle’s chairman and CFO Jeff Henley says this is now the final price, from which we can read little. He also set the expiry date at March 12, coincidentally the date by which the US Department of Justice (DOJ) is expected to provide its anti-trust ruling. Financial opinion on the offer is mixed, noting on the one hand that it was within normal range of PeopleSoft’s share price, but on the other that this may be artificially depressed by the ongoing bid and resulting uncertainty. It does, however, seem a good deal more certain that Oracle seriously does want PeopleSoft, now with JD Edwards, and that any ‘spoiling’ is incidental, although doubtless welcome. Nevertheless, Oracle’s additional bid to get its favoured candidates onto the PeopleSoft board look unlikely to succeed, even with the new shareprice offer. That and the DOJ and ongoing European deliberations make the whole attempt look set to remain for now in the mire. All of which is a distraction for PeopleSoft users, potential users and partners, as well as its employees, most of whom no doubt just want certainty one way or the other. In the meantime, PeoleSoft’s fourth quarter results, just released, were ahead of expectations at $185m licence revenue and $685m total, putting its year end position in the high bracket. That may make shareholders more determined to hang on than to cash in, although the perversity of markets makes that too unreadable. Either way, PeopleSoft president and CEO Craig Conway says: “The Board believes that PeopleSoft has a better plan for stockholders. Oracle’s offer does not begin to reflect the company’s real value, including the value we are creating through our successful combination with JD Edwards. “We believe Oracle is using the entire process – tender offer, antitrust and proxy solicitation – in an attempt to damage our company. Don’t underestimate the significant additional value PeopleSoft can create once the disruption from Oracle’s hostile activities has ended.”