Oracle Lessens Credit for PeopleSoft Buyout
Oracle lowers the amount of its credit line to $1.5 billion from $5 billion needed to purchase the rival applications software provider PeopleSoft.Confident it has a firm grasp on the resources necessary to execute the $7.5 billion hostile takeover bid of PeopleSoft Inc., Oracle Corp. has decided to lower the amount of its credit line to $1.5 billion from $5 billion needed to purchase the rival applications software provider. A recent document filed with the Securities and Exchange Commission by Redwood Shores, Calif.-based Oracle shows the behemoth database vendor has negotiated a 364-day $1.5 billion line of credit with Credit Suisse First Boston, ABN Amro Bank NV and other syndicated lenders for the PeopleSoft acquisition. The move effectively replaces a prior $5 billion credit line agreement Oracle had in tow once it announced its purchase intentions on June 9. Oracle lowered its credit amount with investment bankers due to the company having enough money on hand on its balance sheet, according to an Oracle spokesperson. In addition, the spokesperson noted, the PeopleSoft tender offer remains fully funded and will not fall under any type of financing conditions.
Oracle estimates it will need a total of about $7.5 billion to purchase the PeopleSoft shares at its current asking price of $19.50 a share, and to pay out for related fees and expenses. As of mid-December, 12,395,576 shares of PeopleSofts stock have been tendered to Oracle.