Green Light for PeopleSoft-J.D. Edwards Deal

Oracle extends its offer to buy PeopleSoft after DOJ approves PeopleSoft's purchase of J.D. Edwards.

Even as PeopleSoft Inc. readies to complete its acquisition of J.D. Edwards & Co., Oracle Corp. is affirming its continued interest in buying PeopleSoft.

One of the last hurdles to PeopleSofts acquisition of J.D. Edwards has been removed, PeopleSoft disclosed on Monday. The U.S. Department of Justice has said that the proposed deal does not need to wait the entire period specified under the Hart-Scott-Rodino antitrust law and is free to go forward, PeopleSoft officials said.

Enterprise software developer PeopleSoft, of Pleasanton, Calif., last month offered to buy Denver-based J.D. Edwards for $1.7 billion. That would make PeopleSoft the No. 2 enterprise applications maker, jumping ahead of Oracle but still trailing SAP AG.

PeopleSoft said it expects to complete the exchange of its shares for J.D. Edwards shares by the time the offer expires at midnight on Thursday.

"The Department of Justices decision to grant early termination is great news," said PeopleSoft President and CEO Craig Conway, in a press release. "This is a very important milestone and clears the way for the J.D Edwards acquisition to be completed."

PeopleSoft has not yet scheduled town meetings with J.D. Edwards customers to discuss the post-merger roadmap, said PeopleSoft spokesman Steve Swasey, because there is none yet. But as soon as the companys attention is freed up, such communication will be a priority. "This is a merger of two very customer-centric companies," he said. "As you can imagine, we have plans to do the absolute best thing for all those customers. Well be looking at all the avenues for communicating with them."

Oracle, for its part, has posted on its site an invitation to PeopleSoft users to attend the first of a series of town meetings on Thursday at 9 a.m. PDT.

The PeopleSoft deal, which was welcomed by J.D. Edwards management, was announced days before Oracle made a $6.3 billion hostile takeover bid for PeopleSoft. That offer was due to expire on Friday, but shortly after PeopleSoft said it was ready to complete the J.D. Edwards acquisition, Oracle announced that it was extending its tender offer for PeopleSoft until Aug. 15.

Some analysts had believed that since Oracle had said it was not interested in buying J.D. Edwards then PeopleSofts purchase would nix Oracles bid. But Oracle spokesman Jim Finn said in a statement that the Redwood Shores, Calif., company is "fully committed to acquiring PeopleSoft, with or without J.D. Edwards."

Oracle has also said that a condition on its deal going through was that PeopleSoft had to rescind a so-called "poison pill" that would increase the cost of a hostile takeover.

In fact, Oracle in June filed suit against PeopleSoft in an attempt to block it from exercising the poison-pill option. The suit also aims to get Oracle a meeting with PeopleSofts board of directors as well as a shareholder vote on its offer. A hearing in Delaware Chancery Court, originally scheduled for Wednesday, has been postponed to July 25.

When asked whether the successful acquisition of J.D. Edwards would influence the companys use of the poison pill—after all, it would be poisoning a much larger company than prior to its merger with J.D. Edwards—PeopleSofts Swasey said it was too early to speculate on the issue.