Oracle Renews PeopleSoft Offer

Oracle has extended its tender offer to Oct. 8 for all of PeopleSoft’s common stock. The $21-per-share bid was set to expire at midnight.

The latest $7.7 billion offer is the third since Oracle reduced its takeover price from $26-per-share ($9.4 billion) for PeopleSoft and the first since a federal judge rejected a Department of Justice (DOJ) claim that the proposed merger would violate U.S. antitrust laws.

Overall, it’s the eleventh extension since the Redwood Shores, Calif.-based Oracle launched its hostile takeover bid for PeopleSoft in June of 2003. The PeopleSoft board has rejected the previous offers.

In September, U.S. District Court Judge Vaughn R. Walker ruled that the DOJ had failed to build a convincing case that the takeover would harm competition in the market for certain enterprise software applications. In a month-long trial, the DOJ repeatedly claimed the deal would create a monopoly in the enterprise resource planning (ERP) market, limiting choices to just SAP and Oracle.

Oracle’s lawyers contended the DOJ’s definition of the ERP market was too narrow and should include Microsoft and IBM , as well as Lawson, Fidelty (FESCo) and Ceridian.

In his ruling, Walker said the government failed to prove that outsourcing solutions, best of breed solutions and so-called mid-market vendors should be excluded from the relevant product market. Furthermore, he said the DoJ failed to establish that the area of effective competition is limited to the United States.

The DOJ has until early November to appeal.

Despite Oracle’s legal victory, PeopleSoft continues to fight the takeover attempt. The Pleasanton, Calif.-based firm has its own legal complaint against Oracle scheduled for jury trial to begin Nov. 1. PeopleSoft alleges that Oracle has engaged in unfair business practices, including a deliberate campaign to mislead PeopleSoft’s customers and disrupt its business. The
company wants more than $1 billion in compensation plus punitive damages.

PeopleSoft also has a poison pill clause in its charter, as well as its Customer Assurance Program. Ultimately, to avoid a proxy war, shareholders must be fully convinced the deal would be beneficial.

The European Union (EU) also is waiting to weigh in on the acquisition. An EU spokesperson said Friday the panel hopes to make a decision by the end of October. In April, the EU halted its probe and asked Oracle and PeopleSoft for additional documents.

The EU spokesperson denied an earlier report in The Financial Times that the EU was set to approve the deal.

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