Responding to Oracle Corp.s ploy to acquire PeopleSoft Inc. through a proxy battle, PeopleSofts board of directors voted late last week to hold its annual shareholder meeting two months earlier than anticipated.
PeopleSofts board voted to hold the meeting March 25, which means shareholders are eligible to cast their vote for a new board as early as Feb. 10, leaving Oracle little time to sway shareholders in its direction.
On Jan. 26 Oracle announced its slate of candidates for PeopleSofts board. The company also said it will try to pull together enough shareholder support to replace a sitting board member, Michael Maples, that it said was not properly elected to PeopleSofts board.
Oracle is waging a battle to acquire PeopleSoft, of Pleasanton, Calif., through traditional means as well as the board takeover.
PeopleSofts early annual meeting is an outright effort to put to rest Oracles attempts to overcome the company.
“We voted … so that we could put Oracles apparent efforts to interfere with our business behind us as soon as possible,” Craig Conway, PeopleSofts CEO, said in a statement. “We believe it is important to give PeopleSoft stockholders an opportunity to bring Oracles efforts to disrupt our business to an end by voting in favor of the Boards nominees and rejecting Oracles nominees.”
PeopleSofts board also nominated late last week four sitting members for re-election. They include A. George “Skip” Battle; Craig Conway, the companys president and CEO; Frank Fanzilli, Jr.; and Cyril Yansouni. The company currently has eight sitting board members with four up for re-election. All eight of the current members are unanimous in their vote against the Oracle deal.
With its slate of nominees, PeopleSoft is apparently ignoring Oracles call to re-elect Maples, which leaves Oracle to attempt to expand PeopleSofts bylaws and vote in a fifth board member.
Oracle has said in the past its goal in waging the proxy battle is to nominate a board of directors that will provide an “independent representation for the true ownership of PeopleSoft.”
Oracles nominees—which PeopleSoft contends are being paid to run for election—include Dr. Duke Bristow, an economist at the UCLA Anderson School of Management; Richard Clemmer, president of Venture Capital Tech LLC; Roger Noall, a former executive vice president with KeyCorp; Dr. Laurence Paul, managing principal of Laurel Crown Capital LLC; and Dr. Artur Raviv, professor of finance at Northwestern University.
Oracle spokeswoman Jennifer Glass said the company is not surprised by PeopleSofts early shareholder meeting. “PeopleSoft management wants its shareholders to vote on its board slate before they have a chance to see the results of the first quarter,” said Glass, “particularly since PeopleSoft just lowered its guidance for the quarter.”
The March 25 meeting will not prevent PeopleSoft shareholders from voting on Oracles proposed slate, according to Glass.
Though its estimated it would take Oracle at least two years to overcome PeopleSofts board by a majority, Oracle is steadfast in its goal: force PeopleSoft to remove its poison pill anti-takeover measure, and its controversial Customer Assurance Program that looks to refund customers between two and five times their license fees should certain conditions—namely a takeover —be met.
PeopleSofts board has twice denied Oracles tender offer. In both cases it said the offer undervalues PeopleSoft based on its current financial performance and future potential.
Last Thursday PeopleSoft reported fourth-quarter earnings of $685 million—a 34 percent increase over the same quarter last year—which put to rest Oracles contention that the company is performing poorly.
While Oracle, of Redwood Shores, Calif., has steadfastly refused to up the ante in its $19.50-per-share bid—despite PeopleSoft trading on average $3 per share above Oracles asking price—some experts speculate that PeopleSofts most recent earnings could signal an upward change in Oracles bid.
The proposed acquisition is currently under antitrust investigation by the U.S. Department of Justice, the European Commission and more than half the countrys state Attorneys General.
A spokesman from the DOJ said Monday the departments investigation is ongoing, as did a spokesman from the California Attorney Generals office, which represents the 31 state AGs involved in that investigation.
In related news Oracles CEO Larry Ellison and Chairman and CFO Jeff Henley announced last Friday a change in the way they sell their stock. Each executive adopted pre-arranged stock trading plans to sell their stock over time, enabling them to gradually diversify their investment portfolios.
Under his plan, Ellison may sell up to 120 million shares over one year and gift up to 3.3 million shares to his company, Ellison Medical Foundation, leaving him with 24 percent of Oracles outstanding shares. At the same time, Henley can sell up to 3 million shares over the next six months, leaving him 11.6 million Oracle shares.
In a media roundtable discussion last week, Ellison said he did not know if Oracle owns PeopleSoft shares.