Oracle pushes Ahead -- MIDRANGE-L

Oracle Pushes Ahead With PeopleSoft Bid 

Tue Jun 10, 5:17 AM ET
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By MICHAEL LIEDTKE, AP Business Writer 


SAN FRANCISCO - Business software maker Oracle Corp. pressed ahead
Monday with its $5.1 billion hostile bid for rival PeopleSoft Inc.,
brushing aside legal threats to kill the deal and investor pressure for
a better offer. 





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Oracle expects PeopleSoft to sue it over the bid, according to a letter
Oracle chairman Larry Ellison sent the company. 



Redwood Shores-based Oracle released the letter, which restated
Ellison's desire to meet with PeopleSoft President Craig Conway, who has
already said he can't envision PeopleSoft accepting the $16-per-share
offer. 



In expressing his disdain, Conway - a former Oracle executive who worked
for Ellison for eight years - has likened his old boss to Genghis Khan,
a Mongolian emperor who reigned during the 12th and 13th centuries. 



In his letter, Ellison told Conway the personal attacks and Monday's
legal threat "raise the concern that you have taken a negative position
... before you and the PeopleSoft board have taken the time required to
consider the offer." 



A spokeswoman for PeopleSoft, which is based in Pleasanton, Calif.,
declined to comment on Ellison's letter or the planned lawsuit. 



Investors continued to bet that PeopleSoft will be sold to Oracle or
another bidder at a higher price. 



PeopleSoft's shares gained 8 cents to close at $17.90 Monday on the
Nasdaq Stock Market. Oracle's shares fell 23 cents to close at $12.86 on
the Nasdaq. 



Oracle believes its $16-per-share offer will look more attractive as
investors have more time to digest the deals on the table, said Charles
Phillips, a former software analyst recently hired as an Oracle
executive vice president. 



"We are very happy about the price we have offered," Phillips said. "As
time goes on, we think investors will think about it and say, `Maybe the
better route for PeopleSoft is to be sold to Oracle.'" 



Oracle's tender offer to PeopleSoft shareholders expires July 7,
although that deadline can be extended, according to documents filed
Monday with the Securities and Exchange Commission (news
<http://us.rd.yahoo.com/DailyNews/manual/*http://search.news.yahoo.com/s
earch/news?p=%22Securities%20and%20Exchange%20Commission%22&c=&n=20&yn=c
&c=news&cs=nw>  - web
<http://us.rd.yahoo.com/DailyNews/manual/*http://search.yahoo.com/bin/se
arch?cs=nw&p=Securities%20and%20Exchange%20Commission> sites). 



Meanwhile, PeopleSoft's preferred mate, J.D. Edwards & Co., expressed
its displeasure with Oracle's hostile bid - made four days after
PeopleSoft agreed to buy J.D. Edwards in a stock swap valued at $1.8
billion Monday. 



With its own merger plans in jeopardy, Denver-based J.D. Edwards
attacked Oracle's proposed takeover as a violation of federal antitrust
laws. 



"Oracle's elimination of a competitor, its products, and their ongoing
development would reduce customer choice and product support, and would
leave many customers with greatly diminished options," J.D. Edwards CEO
Bob Dutkowsky said. 



Oracle is confident a PeopleSoft takeover would be approved by
government regulators because the combined company would remain a
distant second to German-based SAP in so-called "enterprise (news
<http://us.rd.yahoo.com/DailyNews/manual/*http://search.news.yahoo.com/s
earch/news?p=%22enterprise%22&c=&n=20&yn=c&c=news&cs=nw>  - web
<http://us.rd.yahoo.com/DailyNews/manual/*http://search.yahoo.com/bin/se
arch?cs=nw&p=enterprise> sites) applications" software. 



Enterprise applications refers to software that helps businesses run
personnel departments and other behind-the-scenes operations. 



Despite SAP's leadership in the market, regulators are likely to take a
hard look at Oracle's takeover plans because the deal would phase out
PeopleSoft's product line, said New York attorney Charles Biggio, an
antitrust expert. 



                



"This kind of hostile deal tends to raise red flags with antitrust
enforcers," said Biggio, a former deputy assistant attorney general in
the Justice Department (news
<http://us.rd.yahoo.com/DailyNews/manual/*http://search.news.yahoo.com/s
earch/news?p=%22Justice%20Department%22&c=&n=20&yn=c&c=news&cs=nw>  -
web
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t/U_S__Government/Executive_Branch/Departments_and_Agencies/Department_o
f_Justice__DOJ_/> sites)'s antitrust division. 


As a major business software maker, J.D. Edwards "could become an
antitrust spoiler if it helps the government understand the areas where
the (Oracle) deal could hurt the market," Biggio said. 


Oracle already is the world's second largest software maker behind
Microsoft, but most of its sales come from database software - a
separate category from enterprise applications. 


Monday's SEC filings provided more details about past discussions of a
possible alliance between Oracle and PeopleSoft. 


The flirtation was serious enough that the two companies entered into a
nondisclosure agreement in early June 2002. Ellison and Conway ended the
discussions two days later, Monday's documents said. 


At the time of those talks, PeopleSoft was in better shape, with its
stock trading above $21 per share while Oracle's stock had fallen below
$9 per share. 


___ 


On the Net: 


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