Oracle Seeks To Pack PeopleSoft Board
Oracle Corp. chose a slate of candidates heavy on academics and venture capitalists to run for PeopleSoft Inc.s board of directors. The move, announced by Oracle late Friday, is the latest in the companys bid to take control of e-business applications rival PeopleSoft.
Oracle, the worlds second-largest independent software company with huge database and applications businesses, launched a hostile bid for PeopleSoft, of Pleasanton, Calif., last June. If Oracle, of Redwood Shores, Calif., can win five seats on the PeopleSofts board it could remove a poison-pill from PeopleSofts bylaws, a major stumbling block to the deal going through.
At PeopleSofts annual meeting this spring Oracle hopes to get five new board members elected. Those candidates are:
- Duke K. Bristow, economist at the UCLA Anderson School of Management;
- Richard L. Clemmer, president of Venture Capital Tech LLC and former CEO of PurchasePro.com Inc.;
- Roger Noall, former senior executive vice president and chief administrative officer of KeyCorp;
- Laurence E. Paul, managing principal of Laurel Crown Capital LLC; and
- Artur Raviv, who is a finance professor at the Kellogg Graduate School of Management, Northwestern University.
"We believe that the incumbent PeopleSoft Board of Directors has consistently refused to consider its stockholders best interests regarding the Oracle tender offer," said Oracle spokesperson, Jim Finn, in a statement. "We intend to nominate a slate of directors who will exercise independent judgment in considering the Oracle tender offer and any other matters before the PeopleSoft board and provide independent representation for the true owners of PeopleSoft, the stockholders."
Oracle will send proxy cards to each PeopleSoft shareholder to enable them to vote for the candidates it put forward. However, PeopleSoft plans to only have four openings on its eight-member board at the meeting. To enable it to take control of the board, Oracle officials also said they would introduce a motion to expand the board to nine.
PeopleSoft could leave the board at eight members if it also put member Michael Maples up for election, which is not currently in the plans. Oracles rational is that Maples, who came to PeopleSoft as a board member of J.D. Edwards and Co., which PeopleSoft acquired last year, was never elected by PeopleSoft shareholders.
PeopleSoft officials shot back on Friday with statement accusing Oracles proposed board members of being little more than front-men for Oracle CEO Larry Ellison.
"We strongly believe that Ellisons hand-picked, paid nominees are biased and would have irreconcilable conflicts of interest if elected to PeopleSofts board," PeopleSoft said, in a statement. "Each nominee is receiving cash compensation and has signed an agreement with Oracle. We believe their ability to be independent is seriously compromised."
Besides the poison pill, a second major stumbling block is that Oracles bid, which is currently valued at $7.3 billion, falls below the price stockholders could currently get for their shares on the open market. The deal is also undergoing regulatory scrutiny from the U.S. Department of Justice, a group of state Attorneys General, and the European Commission.