Jones said PeopleSofts planned acquisition of J.D. Edwards makes sense to him since PeopleSoft would get J.D. Edwards manufacturing software expertise and J.D. Edwards could take advantage of what he said is PeopleSofts superior technology infrastructure. He sees little benefit from Oracle buying PeopleSoft. "Im by no means a market expert, but my guess is its gamesmanship," said Jones. "At least I certainly hope so. I dont want to see Oracle acquire PeopleSoft. I wouldnt want to see the Oracle structure imposed on PeopleSoft.""It would make us re-evaluate our long-term arrangements," said Jones. Nigel Montgomery, European research director at AMR Research, said many PeopleSoft customers would have to re-evaluate their ERP investments if the deal went through. "The only people happy here are SAP," said Montgomery, in London. "All of PeopleSofts customer base would be going back on the market." Montgomery said he didnt expect Oracle Chairman and CEO Larry Ellison would sit idly by while the combined PeopleSoft-J.D. Edwards leapfrogged Oracle in market share. He doubts Oracle can pull it off though, noting that the Redwood Shores, Calif.-based company would likely have to offer between $23 and $25 a share to make the deal palatable to PeopleSoft shareholders, rather than the opening bid of $16 per share. Oracles current bid would eat up $5.1 billion of Oracles $5.5 billion cash horde, Montgomery noted. He said instead the move was likely made to force PeopleSoft to empty its own cash reserves since PeopleSoft may have to close the J.D. Edwards deal sooner to stave off Oracles takeover. A cash acquisition would close faster than a stock acquisition, which PeopleSoft originally proposed, Montgomery explained. "Then PeopleSoft for the rest of the year wouldnt have enough cash to do anything," Montgomery said. "On the face of it, its a sensible move by Oracle. But the ones who lose out are the PeopleSoft customers. At the end of the day its a horrible deal for them."´
And if the acquisition does go through?