The clock has again been reset for all sides in the proposed
takeover of PeopleSoft .
Late Thursday afternoon, Oracle announced it had extended its tender offer for all of the common stock of PeopleSoft to midnight Friday, October
22. The tender offer was previously set to expire on Friday, October 8. This
marks more than a dozen times that Oracle has adjusted its deadline.
Earlier in the day, European Commission (EC) spokesperson Anthony Gooch
confirmed to internetnews.com that the EC will wrap up its antitrust
investigation by November 9, but said the initial opinion may not be enough
to stop the deal from happening.
The EC had started and stopped its probe several times while it waited
for Oracle to deliver key documents. EC antitrust chief Mario Monti had
hinted that the EC wanted to wait until the U.S. courts had enough time to
sort through their antitrust issues.
Oracle’s announcement came one day after board member Joseph Grundfest
testified in a Delaware court that Oracle’s current bid of $21 per share — or around
$7.7 billion total — might need to be renegotiated. Grundfest took the
stand as part of Oracle’s lawsuit
against PeopleSoft designed to remove its Customer Assurance Program (CAP),
which guarantees a refund to PeopleSoft customers should the company be
acquired by a hostile takeover.
Representatives with both Oracle and PeopleSoft again declined to state
whether the two companies were currently in discussions to adjust the merger
price.
The day’s actions follow a whirlwind of announcements last week as the U.S. Department of Justice
declined
to pursue an appeal of its antitrust lawsuit. U.S. District Court Judge
Vaughn R. Walker disagreed with the DoJ’s narrow definition of the top-tier marketplace and ruled in Oracle’s favor. The DoJ sought to block the
proposed transaction because it saw PeopleSoft and Oracle as the
consolidation of the No. 2 and No. 3 players in the enterprise resource
planning software market.
Mike Dominy, senior analyst of business applications and commerce at The
Yankee Group, told internetnews.com that even if the ruling in Europe
is favorable for Oracle, PeopleSoft still has anti-takeover defenses at its
disposal.
“The poison pill is one of the strongest weapons in PeopleSoft’s arsenal.
However, PeopleSoft can render the poison pill inert if it wants to be
acquired,” Dominy said. “My sense is that if the EC does not block the
combining of Oracle and PeopleSoft, and Oracle and PeopleSoft undertake
serious negotiations, the other barriers, such as trial scheduled for January, the
proxy fight and CAP, will be removed or
neutralized.”
The EC’s Gooch said that if the merger were to continue, the EC
would press on with its investigation, because it has jurisdiction over
mergers and takeovers involving companies that do more than EUR5 billion in
combined worldwide sales.
“This is no different from the U.S. examining mergers between non-US
companies that do business in the U.S.,” Gooch said. “As far as the Oracle
bid for PeopleSoft is concerned, Oracle notified the bid to the Commission
at the end of last year for regulatory clearance in Europe.”
Gooch said, theoretically, the EC could allow the merger to proceed if
Oracle and PeopleSoft met certain conditions, similar to the $7 billion
proposed merger of GE and Honeywell, which eventually failed.
