PeopleSoft has repeatedly rejected Oracles buyout offers, most recently this week after a majority of PeopleSoft shareholders indicated they were willing to sell. If Oracles four candidates are approved by shareholders in a PeopleSoft general meeting in the spring, the board would be able to proceed with throwing out a "poison pill" anti-takeover measure and scrapping a controversial customer rebate plan.
Oracle is also engaged in a Delaware court battle to force PeopleSoft to take these two actions; the judge, Vice Chancellor Leo Strine, has extended the case by scheduling additional hearings for Dec. 13 and 14. Strine said he wanted to hear why PeopleSofts board continued to reject the buyout offer, after Oracle declared it had received tender offers for more than 60 percent of PeopleSofts outstanding shares by a deadline of midnight last Friday.
Oracle has returned to the list of five candidates it put forward in an attempted proxy battle last year. Because PeopleSoft reduced its board from nine to eight last month, after firing CEO Craig Conway, only four members are needed to control the board.
The candidates are Duke K. Bristow, Ph.D, an economist at UCLAs Anderson School of Management; Roger Noall, former senior executive vice president and chief administrative officer of bank holding company KeyCorp; Laurence E. Paul, managing principal of Laurel Crown Capital, LLC, a private equity investment firm; and Artur Raviv, a professor of finance at Northwestern Universitys Kellogg School of Management.
They would replace PeopleSoft chairman and CEO David Duffield, Vice Chairman Aneel Bhusri, and independent directors Steven Goldby and Michael Maples.
"Though a large majority of the stockholders have already indicated their desire to sell, the current board appears intent on obstructing the will of the stockholders," said Jeff Henley, Oracles chairman of the board, in a statement. "We plan to give them a choice."
The plan is likely to mean heavy campaigning on both sides ahead of the springs general meeting, with the debate revolving around PeopleSofts real market value. Oracle maintains a "fair" price is $21 per share, and that its offer of $24 per share is generous. PeopleSofts board of directors and several major shareholders maintain the shares are worth more.
PeopleSoft said that many shareholders had tendered their shares in order to keep the possibility of a deal open, while continuing to hold out for a higher price. However, this argument may not hold water with the Delaware court. Some industry observers say that the decision could well go against PeopleSoft in light of shareholders evident approval of Oracles offer.