SAN FRANCISCO—On the third day of Oracle Corp.s blockbuster OracleWorld conference and following as many days of deferring all mention of the "P" word, Executive Vice President Chuck Phillips on Wednesday devoted 45 minutes to reiterating the companys determination to swallow PeopleSoft Inc.
In a meeting with journalists and analysts here, Phillips scoffed at recent PeopleSoft statements to the effect that the Pleasanton, Calif., companys acquisition of J.D. Edwards & Co. will result in greater cost savings and higher revenues than PeopleSoft executives originally perceived, due in part to layoffs and consolidated office space. PeopleSoft executives at that companys Analyst Day meeting in New York last week said revenues for 2003 would come in between $2.145 billion and $2.175 billion—a projection that Phillips said was mere speculation.
"Stock prices can go up if you assume youre going to do something in a year," Phillips said. "If it becomes clear [that something] is not happening, the price will come down. Time will tell."
In the meantime, Oracles bid for PeopleSoft is stalled while the Department of Justice mulls over information it has compiled from Oracle in its antitrust investigation. Another hangup is PeopleSofts poison pill—a stock-related maneuver that would thwart Oracles takeover.
Oracle President and CEO Larry Ellison said on Tuesday that he expects the DOJ investigation to resolve within the next few months—specifically, in October or November, according to Phillips. As for the poison pill, its basically a stalling tactic, Phillips said. "Its very rare that a poison pill stops a deal," he said. "They usually only buy you time to negotiate a price."
Oracle is spending the time meeting with corporate investors and with PeopleSoft customers via online Town Hall meetings and e-mail.
Those investors are all for the deal, Phillips said, as are PeopleSoft customers after theyre heard about Oracles plans "from the horses mouth," he said. "We think [Oracle investors] are for it. … They all said the same thing: It makes sense. The industrys poised to consolidate. [Investors] only rent these stocks. [When Oracle asks them if they want] a higher price, [they say], OK, lets do it."