Update: PeopleSoft rejects Oracle's 'final' offer

The move leaves the decision in the hands of PeopleSoft's shareholders

PeopleSoft Inc.'s board of directors today formally rejected Oracle Corp.'s latest $24-per-share "best and final offer" in its ongoing takeover bid for the company, leaving the fate of its plans in the hands of PeopleSoft shareholders.

PeopleSoft, in an announcement late today, said its board rejected the Oracle offer unanimously.

"The board concluded that PeopleSoft is worth substantially more than Oracle's latest offer," Dave Duffield, PeopleSoft's Chairman and CEO, said in a statement.

PeopleSoft officials notified Oracle of the decision this afternoon.

"We reiterated that ... we would be willing to discuss an offer made by Oracle at an appropriate price - but $24 isn't it," said A. George "Skip" Battle, chairman of PeopleSoft's Transaction Committee. "We told Oracle that its price must reflect both PeopleSoft's intrinsic value and the fact that PeopleSoft is materially more valuable to Oracle now than it was when Oracle made its inadequate $26 per share offer. Oracle indicated they understood our position and appreciated the call.

"We absolutely believe that PeopleSoft is worth far more today than at any point since this process began," Battle said.

Said Duffield: "As PeopleSoft's largest individual stockholder, I am very conscious of shareholder value, as is every other member of our board of directors."

Oracle's offer, valued at $8.8 billion, expires on Nov. 19, meaning that unless shareholders tender their shares by next week, the long-running fight could soon be over.

Oracle launched its takeover attempt in June 2003 and at one point was offering as much as $26 per share, a price PeopleSoft's board also rejected.

"After receiving an affirmative clearance decision from the European Commission, we submitted our best and final offer to the PeopleSoft board," said Oracle CEO Larry Ellison. "Oracle's board deliberated and concluded that the absolute maximum amount we were prepared to pay was $24 dollars a share. Beyond that, there are better uses of our capital, including other acquisitions and repurchasing our own shares.

"Oracle has been at this for a year and a half, and it is now time to bring this matter to a close. On Nov. 19, we will respect the will of the shareholders," he concluded.

"PeopleSoft's shareholders now face a very simple decision," said Jeff Henley, Oracle's chairman of the board. "They can accept our all-cash $24-per-share offer ... or it will be withdrawn. We believe our offer represents a substantial premium over PeopleSoft's stand-alone value now or in the foreseeable future."

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Copyright © 2004 IDG Communications, Inc.

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