13 June--war of words as PeopleSoft spurns Oracle bid. (CRM News Review).It was all action on the enterprise software M&A battlefield, with PeopleSoft Inc and JD Edwards See J.D. Edwards. & Co delivering Oracle Corp a double whammy--rejecting its hostile takeover Hostile Takeover
A takeover attempt that is strongly resisted by the target firm.
Hostile takeovers are usually bad news, as the employee moral of the target firm can quickly turn to animosity against the acquiring firm. bid and filing a $1.7bn lawsuit.
PeopleSoft's board scorned Oracle's $5.1bn offer, recommending shareholders do not sell. Hours later, JD Edwards sued Oracle, claiming the "sole aim" of the bid is to disrupt the JDE-PeopleSoft merger.
In rejecting Oracle's tender offer, PeopleSoft's board cited the possibility of antitrust scrutiny blocking the deal, and the "substantial threat" the move represents to stockholder value, given Oracle's intent to discontinue PeopleSoft's products.
PeopleSoft said the Oracle offer raises antitrust issues in the US and Europe that it believes would cause lengthy delays while the regulatory approval process ran its course, and that ultimately the move would be unlikely to be approved.
"We believe that Oracle's proposed acquisition of PeopleSoft would stifle competition and limit customer choice," PeopleSoft CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. Craig Conway Craig Conway (born May 2, 1985 in Irvine) is a Scottish footballer who currently plays on either wing for Dundee United in the Scottish Premier League. Career
Conway started his career with Ayr United and made sixty-one league appearances for the Honest Men, scoring said in a statement.
"PeopleSoft remains steadfastly focused on providing our customers with superior products and services, and we will not let Oracle's tactics interfere with our business," Conway added.
"I find that very curious," Oracle CEO Larry Ellison Lawrence Joseph Ellison (born August 17, 1944) is the co-founder and CEO of Oracle Corporation, a major database software company. Early life
Ellison was born in New York City to Florence Spellman, a 19-year-old unwed Jewish mother. said in a conference call later that day. "A year ago, Mr Conway approached me with the idea of combining Oracle's application business with PeopleSoft's application business, and Mr Conway then identified himself as the right person to run that combined business."
"What's changed?" Ellison asked, answering: "In his proposal, Mr Conway would be running the combined business. In our proposal, Mr Conway would not be running the combined business."
In a statement, PeopleSoft said that the $16 per share/$5.1bn offer dramatically undervalues the company. At the start of trading on Thursday, PeopleSoft shares opened at $17.65. Oracle shares were valued at $13.38.
"Oracle's offer seeks to enrich Oracle at the expense of PeopleSoft's stockholders, customers and employees," said Conway
Seeking to capitalize on Cap´i`tal`ize on`
v. t. 1. To turn (an opportunity) to one's advantage; to take advantage of (a situation); to profit from; as, to capitalize on an opponent's mistakes s>. the unavoidable confusion the battle has created, while limiting the damage to their own sales, the CEOs of both companies were in full spin-doctor mode in separate conference calls.
Conway sought to discredit TO DISCREDIT, practice, evidence. To deprive one of credit or confidence.
2. In general, a party may discredit a witness called by the opposite party, who testifies against him, by proving that his character is such as not to entitle him to credit or the perception that Oracle's move could cause droves of concerned PeopleSoft customers to leave for the relatively stable arms of SAP AG (company) SAP AG - (Systeme, Anwendungen, Produkte in der Datenverarbeitung - German for "Systems, Applications and Products in Data Processing") A company from Germany that sells the leading suite of client-server business software. The US branch is called SAP America. or elsewhere. Customers have been "overwhelming supportive" he said.
"A constant reaction from customers since last Friday has been surprise, in some cases indignation," he said. "It has energized not only customers but also the selling organization in our own company."
"The real beneficiary this week will be IBM (International Business Machines Corporation, Armonk, NY, www.ibm.com) The world's largest computer company. IBM's product lines include the S/390 mainframes (zSeries), AS/400 midrange business systems (iSeries), RS/6000 workstations and servers (pSeries), Intel-based servers (xSeries) , the only significant competitor to Oracle in the database industry," Conway said. "The level of concern, frustration and outrage is so high I think IBM has the opportunity to convert Oracle customers to IBM customers."
It was an attempt to deflect concerns raised earlier by Wall Street analysts, who flagged concerns about the future of the PeopleSoft product line. Ellison, responding directly to Conway's claims of customer support, said they were "on the face of it, not true".
Merrill Lynch Merrill Lynch & Co., Inc. (NYSE: MER TYO: 8675 ), through its subsidiaries and affiliates, provides capital markets services, investment banking and advisory services, wealth management, asset management, insurance, banking and related products and services on a global basis. analyst Jason Maynard said in a research note: "We believe there are some savvy customers out there that will be opportunistic in this period of uncertainty to gain better deals on additional software purchases, or in renegotiating maintenance contracts."
According to according to
1. As stated or indicated by; on the authority of: according to historians.
2. In keeping with: according to instructions.
3. Ellison's comments during Oracle's conference call, Merrill Lynch has already practiced what it has preached, by deciding to "turn off" its PeopleSoft software and deploying Oracle's instead.
Given that the antitrust issue will form a major part of the anti-acquisition strategy, it is a virtual certainty that JD Edwards would not be allowed to join the pack, if by any chance the Oracle/PeopleSoft merger were to be approved.
JD Edwards president, chairman and CEO Bob Dutkowsky has said that the company has alternative strategies, but reiterated that it is committed to the PeopleSoft deal.
Although it is clear that Oracle is not interested in JD Edwards, it is a curious decision. Even with PeopleSoft, Oracle would not have a credible mid-market strategy and product line, despite the existence of its SMB (1) (Small to Medium-sized Business) Also called "SME" (small to medium-sized enterprise), it refers to companies that are larger than the small office/home office (SOHO), but not huge. initiatives. Yet all the market momentum is expected to be in the unpenetrated mid-market rather than the saturated high-end market.
All eyes will now turn to Oracle to see if it increases its bid for company. If it does, it will indicate that it is serious about the offer.