Oracles Surprise PeopleSoft Price-Cutting Surprises Nobody

By Lisa Vaas  |  Posted 2004-05-18 Print this article Print

It's just one more recent sign pointing to Oracle giving up the PeopleSoft pursuit.

When Oracle on Friday slashed the pile of money its willing to hand over in its hostile takeover of PeopleSoft, bringing the offer down nearly 20 percent to $21 per share, some in the press called it a "surprise move." Surprising, no. One more sign that the takeover is doomed, yes. Its unsurprising, of course, because it matches PeopleSofts falling stock price. In the increasingly unlikely scenario of Oracle actually winning antitrust charges brought by the European Commission and by the U.S. Department of Justice, why in the world would the company want to wind up paying $26 per share for PeopleSoft, whose stock has been trading in the $16-to-$17-per-share range? Anyway, as Oracle Chief Financial Officer Jeff Henley pointed out in the statement put out on Friday, the offer still offers a hefty premium on the going stock price.
PeopleSoft CEO Craig Conway has blamed Oracles dogged pursuit for spoiling the companys sales. The companys first-quarter revenue of $643.1 million fell short of analyst expectations, marking the first time that PeopleSoft has missed estimates since Oracle launched its hostile takeover attempt last June.
Conway may well be right, and hes probably on target when he characterizes Oracles never-say-die takeover attempt as being little more than a campaign to frighten off customers. SAP AG, by far the biggest enterprise software vendor in the PeopleSoft-Oracle-SAP triangle, sees it that way, even though the company has voiced support for Oracles view of what constitutes the marketplace. Back in February, when SAP America CEO Bill McDermott was keynoting at the Wharton Schools Technology Conference, he took a moment to humorously gloat over the situation: "I need to get Mr. Ellison on all my holiday card lists and thank him for disrupting the marketplace," McDermott said at that time. Next page: Was disruption the main intention?

Lisa Vaas is News Editor/Operations for and also serves as editor of the Database topic center. Since 1995, she has also been a Webcast news show anchorperson and a reporter covering the IT industry. She has focused on customer relationship management technology, IT salaries and careers, effects of the H1-B visa on the technology workforce, wireless technology, security, and, most recently, databases and the technologies that touch upon them. Her articles have appeared in eWEEK's print edition, on, and in the startup IT magazine PC Connection. Prior to becoming a journalist, Vaas experienced an array of eye-opening careers, including driving a cab in Boston, photographing cranky babies in shopping malls, selling cameras, typography and computer training. She stopped a hair short of finishing an M.A. in English at the University of Massachusetts in Boston. She earned a B.S. in Communications from Emerson College. She runs two open-mic reading series in Boston and currently keeps bees in her home in Mashpee, Mass.

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