Oracle Corp. Chairman and CEO Larry Ellison early Monday afternoon sent a letter urging PeopleSoft Inc. CEO Craig Conway to avoid jamming up Oracles hostile takeover move with "frivolous litigation." It has been widely reported that litigation is what Conway has in mind to block Oracles bid—a $5.1 billion cash tender offer that was announced on Friday.
"This matter will ultimately be decided by the PeopleSoft stockholders based on the merits and not by frivolous litigation," Ellison wrote. "I reaffirm our request that you redeem your poison pill to enable stockholders to act on our offer, and I expect that the board will not take any further action that would interfere with the rights of PeopleSoft stockholders to determine the outcome of this process."
Ellisons reference to a "poison pill" pertains to PeopleSofts shareholder rights plan, which would cut the legs out from under hostile bidders by making share prices prohibitively expensive.
In his letter, Ellison said that Oracle, of Redwood Shores, Calif., had commenced a tender offer for PeopleSoft on Monday morning. Ellison reiterated a request to meet with Conway and the PeopleSoft to talk it over. "We believe that our offer provides full and fair value to PeopleSoft stockholders and a compelling future for PeopleSoft customers," the letter reads. "I am reaffirming our request to meet with you and your board to discuss our offer further.
Ellison defended his bid for PeopleSoft in the face of charges that the takeover bid is in actuality a monkeywrench thrown in to skewer PeopleSofts recently announced bid for J.D. Edwards.
"Your press release, quotes attributed to you in the press, and a notice we just received with respect to your intention to commence litigation against us raise the concern that you have taken a negative position with respect to the merits and motivations behind our offer before you and the PeopleSoft board have taken the time required to consider the offer," Ellison said. "We have made a serious, fully financed, all-cash offer to your stockholders, and your fiduciary duties to those stockholders require a full and fair review done in good faith."
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