After much speculation that it would raise its bid yet again, Oracle Corp. Monday morning announced its latest offer for PeopleSoft Inc.: $24 per share, up from $21 per share, or $7.7 billion.
This is Oracles “best and final offer,” officials said in a press release.
New terms of the amended offer stipulate that for the deal to go through a majority of PeopleSofts shares must be tendered by Nov. 19—the date this offer expires—and that PeopleSofts board must eliminate both its poison pill anti-takeover measure and the “Delaware law obstacle” that likely refers to PeopleSofts Customer Assurance Program.
The CAP, which offers refunds of between two and five times license fees, and the poison pill that floods the market with PeopleSoft shares in the event of a hostile buyout from Oracle make the proposed merger prohibitively expensive for Oracle to acquire PeopleSoft.
Oracle, of Redwood Shores, Calif., and PeopleSoft, of Pleasanton, Calif., are awaiting the ruling on both fronts from Delaware Chancery Court Judge Leo Strine. Oracles suit against PeopleSoft was heard in the Chancery Court last month. The case seeks the courts removal of both roadblocks from Oracles takeover path. Strines decision is expected by months end, if not sooner.
Two additional major stumbling blocks have been removed from Oracles path. Last week the European Commission said it will allow the merger after a months-long antitrust investigation. Similarly, a Northern California U.S. District Court ruled that the merger posed no antitrust issues. A case was brought by the U.S. Department of Justice, which said last month it would not appeal the decision.
PeopleSofts board of directors has unanimously and steadfastly refused to entertain any discussions with Oracle regarding its successive tender offers. The first unwanted bid, set at $16 per share, was launched in June 2003; the offer has since been extended, raised, lowered and now raised again. The highest offer of $26 per share was declined by PeopleSofts board.
In a letter to PeopleSofts board dated Oct. 31, Oracle threatened more legal action. “Our amended offer will expire … November 19. If … the holders of a majority of PeopleSofts outstanding shares have tendered their shares in our offer—and the Board of Directors of PeopleSoft has failed to remove the poison pill and Section 203 obstacles to our offer to permit us to acquire the tendered shares—then we will look to the Delaware Chancery court to take appropriate action,” the letter said.
Oracle said that if a majority of shareholders have not tendered by the expiration date, Oracle will then withdraw its offer.