Oracle wants PeopleSoft
Fecha Viernes, junio 06 @ 17:39:59
Tema Banca y Finanzas:: Finances & Big Blue
| By LouAnn Lofton (TMF Bling)
To call Larry Ellison brash is about as obvious as calling Funny Cide the fan favorite for this weekend's Belmont Stakes. And yet, with today's unsolicited bid for PeopleSoft (Nasdaq: PSFT), Oracle (Nasdaq: ORCL) and its charismatic leader's gall are again raising some eyebrows.
Just this past Monday, PeopleSoft announced that it would be buying smaller rival J.D. Edwards (Nasdaq: JDEC) for $1.7 billion in stock. The combination of the two companies would have catapulted them ahead of Oracle, to take over the No. 2 spot in the enterprise-applications software market. PeopleSoft had hoped to close the deal this fall.
That was apparently enough to spur Ellison and crew to action. Oracle offered $16 in cash per share this morning in what amounts to a $5.1 billion hostile bid for PeopleSoft. According to Ellison, PeopleSoft CEO Craig Conway talked to him last year about combining the two companies' business software units, but a structure for the deal couldn't be agreed on. As of press time, PeopleSoft was still formulating a public response to Oracle's offer.
Ellison sent a letter to PeopleSoft's board, informing them that he'd like to discuss the bid. However, Oracle is moving ahead quickly and will start its tender offer for shares this coming Monday. With PeopleSoft shares jumping to $18 and change today, Oracle may have to sweeten its bid to convince shareholders.
The big loser here may end up being J.D. Edwards, which is exactly as Oracle wants it. Assuming Oracle completes the PeopleSoft acquisition, it could then prevent the J.D. Edwards deal. Oracle discreetly pointed to this possibility in its press release announcing the bid.
Ellison himself would later allude to it in a conference call. He called the PeopleSoft/J.D. Edwards deal "a very risky merger" and said that Oracle's $16 offer is a "much safer road for the PeopleSoft shareholder." In a nod to what a CEO should say in order not to appear so hostile, though, Ellison said of the J.D. Edwards deal, "... We are certainly interested." Yeah, right.
Does Oracle really want PeopleSoft? Or does it just want to prevent the merger of two rivals that would surpass it once combined? Doubting Oracle's motivations here isn't unfounded. Oracle shareholders can't feel good, though, about what appears to be a very impetuous (and expensive) move. But then again, that's what you get when Larry Ellison's at the helm of your company.
Lawrence J Ellison
Chairman of the Board, Chief Executive Officer atOracle CorporationRedwood City, California TECHNOLOGY / SOFTWARE & PROGRAMMING Officer since May 1977 Director since May 1977 58 years old
  Track This Person Mr. Ellison is one of our co-founders and has been Chief Executive Officer since June 1977. Mr. Ellison has been Chairman of the Board since June 1995, served as Chairman of the Board from April 1990 until September 1992 and served as President of Oracle from May 1977 to June 1996. He is also a director of Apple Computer, Inc., a computer company. Lawrence J Ellison has been listed in Forbes' 400 Richest Americans, America's Most Powerful People and World's Richest People.
Cash Compensation (FY May 2002)
Salary
$0
Bonus
$0
O T H E R
Latest FY other short-term comp.
$38,622
Latest FY other long-term comp.
$0
Latest FY long-term incentive payout
$0
Total
$38,622
Stock Options (FY May 2002)
Number of options
Market value
exercised
0
$0
unexercised
59,375,000
$227,850,668
unexercisable
21,500,000
$37,264,350
Total
80,875,000
$265,115,018
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