After meeting Saturday morning, the PeopleSoft board "unanimously reaffirmed its previous conclusion that Oracles latest offer is inadequate and that the company is worth substantially more than the $24 per share offered by Oracle." The board is standing firm on its belief that the companys business plan creates superior value for stockholders.
Oracle announced early Saturday that it had received tender offers for a majority of PeopleSoft shares. It called on PeopleSofts board to meet with Oracle officials for talks aimed at reaching a definitive merger agreement—if possible, before the market opens on Monday.
"Based on numerous conversations we have had with our largest stockholders over the past 10 days, the board believes that a majority of our stockholders agree that the Oracle $24 offer is inadequate and does not reflect PeopleSofts real value," said A. George Battle, chairman of the boards Transaction Committee, in a statement.
This majority includes stockholders who didnt tender their shares and those who did tender their shares "but told us that they believe PeopleSoft is worth more than $24 per share," Battles statement said.
To support this assertion, the board noted that it expects "substantial" sequential sales and revenue growth for the 2004 fourth quarter. The company projects that total revenue will be in the range of $700 million to $715 million, with software license revenue in the range of $175 million to $185 million. The company contends that this momentum will continue into 2005.
The board decision ensures that the nearly 18-month buyout battle will continue in the courts as well as in the boardrooms of both companies. Oracle will likely return to Delaware Chancery Court to argue for the removal of a "poison pill" shareholder rights provision that would flood the market with millions of additional shares in an attempt to block the hostile buyout offer.