Oracle Corp. mounted a $5.1 billion hostile takeover bid
Friday for business software rival PeopleSoft that the target's chief executive
angrily rebuffed as a blatant attempt to derail his own merger plans.
Accentuating the bad blood between them, PeopleSoft chief executive Craig
Conway called the offer from his former boss, Oracle chairman Larry Ellison,
"There is no condition that I can even remotely imagine where PeopleSoft
would be sold to Oracle," Conway told The Associated Press.
The offer came four days after PeopleSoft announced an agreement to buy
Denver-based J.D. Edwards & Co. in a stock swap valued Friday at $1.9 billion.
Ellison called that deal "very peculiar" in an interview Friday. "You have one
company in distress merging with another in even greater distress," Ellison
said. "We think this all-cash offer is a much safer alternative."
Oracle, the world's second-largest software maker, offered $16 per
PeopleSoft share, just 6 percent above their closing price of $15.11 before the
offer. PeopleSoft shares soared $2.71 to end at $17.82 Friday on the Nasdaq
Stock Market, indicating that investors expected Oracle to sweeten its offer.
Oracle's shares fell 27 cents to $13.09 on the Nasdaq.
Ellison didn't rule out the possibility of a higher offer, noting "you
never say never." Conway described Oracle's bid as "atrociously bad behavior"
designed to ruin PeopleSoft's planned marriage with J.D. Edwards.
"I think Larry saw a wedding and he showed up with a shotgun because he
didn't get invited," Conway said. "It's a page straight out of Genghis Kahn."
Oracle will formally begin its bid Monday and try to complete the takeover
in July - two to three months before PeopleSoft aims to complete its purchase
of J.D. Edwards. Oracle didn't rule out adding J.D. Edwards to the mix if it
can acquire PeopleSoft first.
Under Oracle's plan, the PeopleSoft brand would eventually disappear,
although technical support would be provided to PeopleSoft's existing
customers. Oracle managers also indicated PeopleSoft's roughly 8,000 workers
could expect mass layoffs, though they did not get into specifics.
But PeopleSoft management could choose to activate an anti-takeover defense
known as a "poison pill," designed to thwart undesired suitors.