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.