Oracle sets Nov. 19 deadline, says it plans to develop new PeopleSoft products
Oracle has tabled what it calls its “best and final” offer in its ongoing attempt to gobble up PeopleSoft. It increased the price of its cash offer by 14 per cent from $21 to $24 (all figures US).
In a statement the company said “this price represents a significant premium to recent trading prices, and is in excess of the 52-week closing price high for PeopleSoft shares. The increased offer price is nearly 60 per cent higher than the closing price on the day prior to Oracle’s announcement of its intention to commence the original offer.”
“Our best and final offer is $24 per share, which we believe represents a substantial premium to the price at which those shares would trade were it not for Oracle’s offer,” said Jeffrey O. Henley, chairman of the board of Oracle. “We will withdraw our offer unless a majority of PeopleSoft shares are tendered into our offer by Nov. 19, 2004.”
In a conference call with analysts, Henley said the time had come for the stockholders of PeopleSoft to decide the outcome. The battle between the software giants has raged since Oracle first announced its hostile takeover bid in June 2003.
Oracle plans to keep making PeopleSoft products
In a shift from previous statements, Oracle said it would introduce a new generation of PeopleSoft products. Oracle had said in the past it would stop developing PeopleSoft products if its takeover bid succeeded, but would support existing products.
“We continue to be committed to supporting PeopleSoft's customers and products. We intend to develop and introduce a next generation of PeopleSoft products — PeopleSoft 9 — and in connection with that effort we intend to maintain an engineering organization at the Pleasanton campus,” Oracle said in an Oct. 31 letter to PeopleSoft. “We believe that the value and certainty of our offer are far preferable to PeopleSoft's uncertain future as an independent company. We look forward to a prompt response to this proposal.”
The shift in thinking could appease PeopleSoft customers who were opposed to the takeover.
PeopleSoft’s response to the latest bid
PeopleSoft put out a statement today advising its stockholders to “take no action” in response to Oracle’s latest offer.
The company said its board of directors would meet to review the amended tender offer and make its recommendation to stockholders “in due course.”
The board has rejected four previous offers from Oracle, including a higher bid of $26 per share earlier this year.
“Each time the board, after careful consideration, unanimously concluded that the offer undervalued PeopleSoft and recommended that PeopleSoft stockholders reject Oracle’s offer and not tender their shares,” the company said in a statement.
PeopleSoft also made reference to its lawsuit against Oracle. It is seeking more than $1 billion plus punitive damages. It alleges Oracle has “engaged in unfair business practices, including a deliberate campaign to mislead PeopleSoft’s customers and disrupt its business.” That trial is scheduled to begin on Jan. 10, 2005, in California.
Oracle’s letter to PeopleSoft
Below is the full text of a letter sent by Oracle to the PeopleSoft board of directors on Oct. 31, 2004:
Members of the Board:
For almost 17 months the owners of PeopleSoft — the stockholders — have been denied the opportunity to consider our offer, while we have fought our way through a variety of regulatory obstacles actively promoted by the PeopleSoft Board of Directors. Those obstacles no longer exist. Last week the European Commission voted to clear Oracle's bid for PeopleSoft. This decision, coupled with the decision of the U.S. Department of Justice not to appeal Judge Walker's decision, means that now the PeopleSoft Board of Directors is the only obstacle to stockholder consideration of our offer.
The time has come to bring this matter to a conclusion by allowing the stockholders to decide. We will announce tomorrow morning our best and final offer to acquire all of the shares of PeopleSoft. The principal elements of our offer include:
•We have increased the price of our fully-financed cash offer to $24 per share. This price represents nearly a 60 per cent premium to the trading price for PeopleSoft shares prior to our offer and a significant premium to recent trading prices, and is in excess of the 52-week closing price high for PeopleSoft shares. More importantly, we believe it represents a substantial premium to the price at which those shares would trade were it not for our offer. This is our best and final offer and it will not be increased.
•In light of recent regulatory developments we will eliminate most of the conditions to our offer. The principal remaining conditions to our offer will be the Minimum Tender Condition, the Rights Condition and the Section 203 Condition.
•Our amended offer will expire at midnight EST on Friday, Nov. 19. If the Minimum Tender Condition is satisfied at that time-meaning that the holders of a majority of PeopleSoft's 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.
•If the Minimum Tender Condition has not been satisfied by midnight EST on Nov. 19, 2004, we will withdraw our offer.
We are willing to let PeopleSoft's stockholders decide the outcome, and to withdraw our offer if it does not receive majority support. We think it is incumbent on the PeopleSoft Board to show at least equal deference to the will of its own stockholders.
Our preference, as we have maintained since our original communication with you on June 6, 2003, is to enter into a merger agreement with PeopleSoft. You have to date refused to negotiate with us. Although our $24 price is final and non-negotiable, we are ready to negotiate the other terms of a merger agreement with you, and can provide you with a draft merger agreement promptly.
We continue to be committed to supporting PeopleSoft's customers and products. We intend to develop and introduce a next generation of PeopleSoft products — PeopleSoft 9 — and in connection with that effort we intend to maintain an engineering organization at the Pleasanton campus.
We believe that the value and certainty of our offer are far preferable to PeopleSoft's uncertain future as an independent company. We look forward to a prompt response to this proposal.
Sincerely,
Jeff Henley
Chairman of the Board
Larry Ellison
Chief Executive Officer
The solicitation and the offer to buy PeopleSoft's common stock is only made pursuant to the Offer to Purchase and related materials that Oracle Corporation and Pepper Acquisition Corp. filed on June 9, 2003, as amended and restated on February 12, 2004 and as subsequently amended. Stockholders should read the Amended and Restated Offer to Purchase and related materials carefully because they contain important information, including the terms and conditions of the offer. Stockholders can obtain the Amended and Restated Offer to Purchase and related materials free at the SEC's website at www.sec.gov, from Credit Suisse First Boston LLC, the Dealer Manager for the offer, from MacKenzie Partners, the Information Agent for the offer, or from Oracle Corporation.
In a statement the company said “this price represents a significant premium to recent trading prices, and is in excess of the 52-week closing price high for PeopleSoft shares. The increased offer price is nearly 60 per cent higher than the closing price on the day prior to Oracle’s announcement of its intention to commence the original offer.”
“Our best and final offer is $24 per share, which we believe represents a substantial premium to the price at which those shares would trade were it not for Oracle’s offer,” said Jeffrey O. Henley, chairman of the board of Oracle. “We will withdraw our offer unless a majority of PeopleSoft shares are tendered into our offer by Nov. 19, 2004.”
In a conference call with analysts, Henley said the time had come for the stockholders of PeopleSoft to decide the outcome. The battle between the software giants has raged since Oracle first announced its hostile takeover bid in June 2003.
Oracle plans to keep making PeopleSoft products
In a shift from previous statements, Oracle said it would introduce a new generation of PeopleSoft products. Oracle had said in the past it would stop developing PeopleSoft products if its takeover bid succeeded, but would support existing products.
“We continue to be committed to supporting PeopleSoft's customers and products. We intend to develop and introduce a next generation of PeopleSoft products — PeopleSoft 9 — and in connection with that effort we intend to maintain an engineering organization at the Pleasanton campus,” Oracle said in an Oct. 31 letter to PeopleSoft. “We believe that the value and certainty of our offer are far preferable to PeopleSoft's uncertain future as an independent company. We look forward to a prompt response to this proposal.”
The shift in thinking could appease PeopleSoft customers who were opposed to the takeover.
PeopleSoft’s response to the latest bid
PeopleSoft put out a statement today advising its stockholders to “take no action” in response to Oracle’s latest offer.
The company said its board of directors would meet to review the amended tender offer and make its recommendation to stockholders “in due course.”
The board has rejected four previous offers from Oracle, including a higher bid of $26 per share earlier this year.
“Each time the board, after careful consideration, unanimously concluded that the offer undervalued PeopleSoft and recommended that PeopleSoft stockholders reject Oracle’s offer and not tender their shares,” the company said in a statement.
PeopleSoft also made reference to its lawsuit against Oracle. It is seeking more than $1 billion plus punitive damages. It alleges Oracle has “engaged in unfair business practices, including a deliberate campaign to mislead PeopleSoft’s customers and disrupt its business.” That trial is scheduled to begin on Jan. 10, 2005, in California.
Oracle’s letter to PeopleSoft
Below is the full text of a letter sent by Oracle to the PeopleSoft board of directors on Oct. 31, 2004:
Members of the Board:
For almost 17 months the owners of PeopleSoft — the stockholders — have been denied the opportunity to consider our offer, while we have fought our way through a variety of regulatory obstacles actively promoted by the PeopleSoft Board of Directors. Those obstacles no longer exist. Last week the European Commission voted to clear Oracle's bid for PeopleSoft. This decision, coupled with the decision of the U.S. Department of Justice not to appeal Judge Walker's decision, means that now the PeopleSoft Board of Directors is the only obstacle to stockholder consideration of our offer.
The time has come to bring this matter to a conclusion by allowing the stockholders to decide. We will announce tomorrow morning our best and final offer to acquire all of the shares of PeopleSoft. The principal elements of our offer include:
•We have increased the price of our fully-financed cash offer to $24 per share. This price represents nearly a 60 per cent premium to the trading price for PeopleSoft shares prior to our offer and a significant premium to recent trading prices, and is in excess of the 52-week closing price high for PeopleSoft shares. More importantly, we believe it represents a substantial premium to the price at which those shares would trade were it not for our offer. This is our best and final offer and it will not be increased.
•In light of recent regulatory developments we will eliminate most of the conditions to our offer. The principal remaining conditions to our offer will be the Minimum Tender Condition, the Rights Condition and the Section 203 Condition.
•Our amended offer will expire at midnight EST on Friday, Nov. 19. If the Minimum Tender Condition is satisfied at that time-meaning that the holders of a majority of PeopleSoft's 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.
•If the Minimum Tender Condition has not been satisfied by midnight EST on Nov. 19, 2004, we will withdraw our offer.
We are willing to let PeopleSoft's stockholders decide the outcome, and to withdraw our offer if it does not receive majority support. We think it is incumbent on the PeopleSoft Board to show at least equal deference to the will of its own stockholders.
Our preference, as we have maintained since our original communication with you on June 6, 2003, is to enter into a merger agreement with PeopleSoft. You have to date refused to negotiate with us. Although our $24 price is final and non-negotiable, we are ready to negotiate the other terms of a merger agreement with you, and can provide you with a draft merger agreement promptly.
We continue to be committed to supporting PeopleSoft's customers and products. We intend to develop and introduce a next generation of PeopleSoft products — PeopleSoft 9 — and in connection with that effort we intend to maintain an engineering organization at the Pleasanton campus.
We believe that the value and certainty of our offer are far preferable to PeopleSoft's uncertain future as an independent company. We look forward to a prompt response to this proposal.
Sincerely,
Jeff Henley
Chairman of the Board
Larry Ellison
Chief Executive Officer
The solicitation and the offer to buy PeopleSoft's common stock is only made pursuant to the Offer to Purchase and related materials that Oracle Corporation and Pepper Acquisition Corp. filed on June 9, 2003, as amended and restated on February 12, 2004 and as subsequently amended. Stockholders should read the Amended and Restated Offer to Purchase and related materials carefully because they contain important information, including the terms and conditions of the offer. Stockholders can obtain the Amended and Restated Offer to Purchase and related materials free at the SEC's website at www.sec.gov, from Credit Suisse First Boston LLC, the Dealer Manager for the offer, from MacKenzie Partners, the Information Agent for the offer, or from Oracle Corporation.
