Oracle Stretches PeopleSoft Offer

 
 
By Renee Boucher Ferguson  |  Posted 2004-09-23 Email Print this article Print
 
 
 
 
 
 
 

The company extends its $7.7 billion hostile takeover bid yet again on the eve of its civil trial, which seeks to get rid of the PeopleSoft's poison-pill measure.

For the twelfth time since the whole saga began last year, Oracle has extended its tender offer for PeopleSoft. Redwood Shores, Calif.-based Oracle Corp. announced Thursday that it has extended its $7.7 billion antagonistic takeover bid for PeopleSoft to midnight Oct. 8. The previous offer was set to expire at midnight this Friday. The updated offer comes on the eve of the next step in the ongoing drama. Oracles civil trial against Pleasanton, Calif.-based PeopleSoft Inc. begins Monday in Delawares Chancery Court. The trial, which seeks the dissolution of PeopleSofts poison-pill anti-takeover measure, will be heard by Vice Chancellor Leo Strine.
PeopleSofts poison pill comes in the form of its Customer Assurance Program, which would require that Oracle refund between two and five times some customers license fees in the event that Oracle acquires PeopleSoft and stops supporting its software within a specified amount of time.
While Oracle has gone to some lengths to assure PeopleSoft users that it would not stop support, many remain skeptical. Early on, when Oracle initially lobbed its hostile bid at PeopleSoft, Oracle CEO Larry Ellison said he would all but kill the software. PeopleSoft, for its part, has its own civil trial against Oracle in the works. That trial, scheduled to be heard in an Oakland, Calif., court in November, seeks an injunction to block Oracles bid, as well as $1 billion in damages.
If the outcome of PeopleSofts trial mirrors the Justice Departments efforts, the company is in trouble. Oracle earlier this month won a federal case to pursue its acquisition of PeopleSoft, trouncing the Justice Departments request for an injunction based on antitrust issues. Read more here about the implications of Oracles victory against the DOJ. The Justice Department has not yet determined whether it will appeal the U.S. District Courts decision. Meanwhile, PeopleSofts board members have steadfastly declined the numerous offers from Oracle. But the fight has clearly hurt PeopleSoft. Some existing customers have delayed upgrade decisions, while other potentially new customers have held back on deals pending the outcome of the Oracle debacle. To allay some of those fears, PeopleSoft announced Thursday at its Connect user conference in San Francisco a new initiative, called NOW, that looks to offer some fairly substantial price cuts for new license deals. Available until Dec. 31, NOW—which is not an acronym for anything in particular, officials said—is designed to make upgrading PeopleSofts latest products "easier and more cost-efficient." PeopleSoft customers are rallying around the companys recently announced deal with IBM. Click here to read more. The deal, part of PeopleSofts Total Ownership Experience initiative announced 15 months ago, offers a number of incentives: a free technical upgrade if one of PeopleSofts six Global Services solution centers are used; free application management services for one quarter following the go-live date; free access to PeopleSofts Passport training materials for five people for one year; and $100,000 toward qualified new software purchases that amount to more than $200,000. PeopleSoft was not clear on what constitutes a qualified purchase. PeopleSofts TOE initiative is geared toward reducing implementation time. Check out eWEEK.coms Enterprise Applications Center at http://enterpriseapps.eweek.com for the latest news, reviews and analysis about productivity and business solutions.

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