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A day before the deadline set by Oracle for PeopleSoft shareholders to accept its takeover bid, PeopleSoft founder and CEO David Duffield issued a letter defending stock sales he made in late 2003.
In the letter to Oracle Corp. chief executive Larry Ellison, Duffield said he “recently learned that Oracle and its representatives are circulating to the media a chart detailing my sales of PeopleSoft stock in late 2003 and suggesting that there is a great story there.”
He characterized Oracles criticism of those sales as “distortions,” and threatened to bring suit should Oracle continue.
An Oracle spokeswoman told eWEEK.com that the company wouldnt comment on Duffields letter, although Oracle did on Thursday issue a final plea from board chairman Jeffrey Henley to PeopleSoft Inc. stockholders asking them to consider the $24 per share tender offer, which “is above the 52-week high closing price.”
The criticism of Duffields stock sales was raised in a shareholder conference call Monday by Oracle co-president Safra Catz, who said Duffield profited from share sales in October 2003, which came after PeopleSoft announced earnings guidance that it ultimately missed.
Duffield said in his letter that nearly all of those sales were part of his Rule 10b5-1 plan, which he called a “prearranged plan over which I have no discretion.” Two sales were made outside of the 10b5-1 plan by Maddies Fund, a pet rescue foundation that Duffield helped establish. Duffield said the funds Finance Committee makes all stock sale decisions on which he is “not consulted.”
Duffield also noted that Ellison has a 10b5-1 program and has sold “millions of Oracle shares this year.”
The takeover, which started 17 months ago, now has just over 24 hours to live. Oracles letter to shareholders Thursday said PeopleSofts recent 2005 earnings guidance was unattainable, and said they should consider the “track record” in any decision.
Former PeopleSoft CEO Craig Conway was fired in part because of misleading statements about whether Oracles pending takeover bid would hurt the companys sales, and Oracle played up PeopleSofts credibility in the letter.
Oracles Henley also reiterated that if a majority of PeopleSoft shares are not tendered by midnight Friday, Oracle will withdraw its offer. If a majority is received by Oracle, however, it will ask the PeopleSoft board or the court overseeing the proceedings to “remove the final conditions” for a takeover.
“The choice is yours,” Henley wrote.
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