PeopleSofts board of directors is refusing yet again to entertain Oracles all-cash tender offer, according to a news release issued by Oracle on Wednesday afternoon.
The offer, which stands at $24 per share, or $8.8 billion, is Oracles “best and final” offer. Oracle Corp., of Redwood Shores, Calif., raised its bid Nov. 1 from $21 per share to the current $24 per share. At the same time, company officials warned that unless more than 50 percent of PeopleSoft Inc. shareholders tender their shares by midnight next Friday, Nov. 19, the offer will be withdrawn.
“Oracles board deliberated and concluded that the absolute maximum amount we were prepared to pay was $24 a share. Beyond that, there are better uses of our capital including other acquisitions and repurchasing of our own shares,” Oracle CEO Larry Ellison said in a statement.
“Oracle has been at this for a year and a half, and it is now time to bring this matter to a close. On Nov. 19, we will respect the will of the shareholders.”
As of last week, about 5.5 percent of PeopleSofts shareholders had tendered their shares to Oracle, according to Steve Swasey, spokesperson for PeopleSoft, in Pleasanton, Calif.
Swasey was not immediately available to confirm the boards tender-offer refusal. PeopleSofts board had said earlier that it would make its decision known on or before Nov. 15.
As part of its condition to acquire PeopleSoft—should 50 percent of the shareholders tender their shares—Oracle has said PeopleSoft must drop its poison pill and Customer Assurance Program anti-takeover measures.
The so-called poison pill would flood the market with PeopleSoft shares in the event of a hostile takeover—Oracles offer is by all definitions hostile—and the customer assurance program would refund PeopleSoft customers between two and five times their license fees in the event that Oracle acquires the company and discontinues support for its software. Both provisions together would add billions to Oracles purchase price.
Oracle filed a civil suit in the Delaware Chancery Court against PeopleSoft to have both provisions removed legally. The court, which prompted Oracle to make its offer last week, is expected to announce its ruling sometime this month.
Its no surprise that PeopleSofts board would decline this latest offer; it would be the fifth such offer it has unanimously rejected on the grounds that the offers—including a high of $26 per share—undervalued the company.
Oracle executives, in the meantime, have been on a road show of sorts for the past week and will continue through next week, hoping to convince PeopleSoft shareholders that a combined Oracle and PeopleSoft represents a better deal for them than does an independent PeopleSoft.
Its expected that PeopleSofts newly instated CEO, Dave Duffield, will announce Monday his vision for the future of PeopleSoft.