Oracle Takes Majority Control of PeopleSoft

Oracle has taken majority ownership of PeopleSoft after that company’s stockholders tendered roughly 75 percent of their shares in favor of the $10.3 billion acquisition.

The news is a major step forward for Oracle in its bid for PeopleSoft, but the tender falls short of the 90 percent required for a total takeover. If Oracle fails to capture the 90 percent required, it will have to hold a special shareholder vote on the merger, delaying the deal’s close by a month or more.

The offering period of Oracle’s offer to purchase outstanding PeopleSoft stock expired yesterday at midnight. Oracle announced a new offering period commencing Wednesday that will expire on Tuesday, Jan. 4, 2005 at 8 p.m., eastern time.

Preparing for the takeover, Oracle said in a statement it has designated four representatives to serve on PeopleSoft’s board of directors, replacing PeopleSoft board members who have resigned. This gives Oracle majority representation.

Two previous PeopleSoft board members will remain on the PeopleSoft board until the merger between the companies is completed. PeopleSoft CEO David Duffield resigned
Dec. 21, according to a Tuesday filing with the Securities and Exchange Commission.

Oracle CEO Larry Ellison said in a statement Oracle is moving forward with the integration planning process. Ellison has pledged to enhance PeopleSoft 8 and develop a PeopleSoft 9, as well as enhance JD Edwards 5 and develop a JD Edwards 6.

If at least 90 percent of the outstanding shares of PeopleSoft are tendered before the expiration of the subsequent offering period, Oracle expects to complete the second-step merger shortly after expiration. The deal is expected to close in early January, capping 18 months of tense legal battles and market unrest that shook PeopleSoft.

To date, Oracle has accepted 298,834,574 million shares for payment. Oracle’s acquisition subsidiary Pepper Acquisition Corp. will accept for payment and promptly pay shareholders $26.50 per share as they are tendered in the new offering period.

A look back at some of the key highlights in the fight to merge the business application giants may be viewed here.

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