Oracle announced on Friday that it was reducing its cash offer to acquire PeopleSoft to US$7.7 billion, from US$9.4 billion.
Oracle executives said the decision reflected the decline in the share price of PeopleSoft since it first announced its hostile takeover bid last June. Oracle said its new offer of US$21 a share for PeopleSoft represents a 21 percent premium over PeopleSoft's closing price on Friday of US$17.30. The earlier offer, made in February, was US$26 for each share of PeopleSoft.
Oracle announced the reduced offer after the close of regular trading. Shares of PeopleSoft fell to as low as US$16.90 in after-hours trading.
"Our revised offer reflects changes in market conditions and in PeopleSoft's market valuation," said Jeffrey Henley, Oracle's chairman and chief financial officer, in a statement. He noted that the new price was "a higher premium than our previous offer was on the date made, calculated on both a single-day and 30-day-moving-average basis."
Oracle's decision to lower its bid comes as lawyers for Oracle and the Justice Department prepare to square off in US District Court in San Francisco on June 7, after the agency's decision to sue to block the deal.
Federal antitrust regulators ruled in February that the merger would be anticompetitive, because it would reduce the market in business software makers from three major competitors to two, and would drive up prices. The trial is expected to last about six weeks.
If Oracle prevails in the legal case, the company will still need to persuade PeopleSoft shareholders to tender their shares and get approval for the merger from the PeopleSoft board.
Tad Piper, an analyst at Piper Jaffray & Co, said that the lower offer could make both those efforts considerably more difficult.
"It does represent, in some ways, less interest by Oracle in purchasing PeopleSoft," Piper said.
Also complicating a merger is PeopleSoft's customer rebate program, which has swelled in recent months to nearly US$2 billion. That program, announced last summer, says that in the event PeopleSoft is acquired, the acquiring company could be responsible for customer refunds up to five times the original value of the deal.
Oracle, based in Redwood Shores, California, offered PeopleSoft shareholders US$16 a share last June 6, but 12 days later raised the bid to US$19.50 a share. In February, the company raised its offer to US$26 a share.
Executives from PeopleSoft, based in Pleasanton, Calif., rejected every offer, calling Oracle's unsolicited bid a bad deal for PeopleSoft shareholders and accusing Oracle of trying to harm PeopleSoft's business.
PeopleSoft executives said the company would review Friday's offer, but stood by their belief that Oracle's takeover effort would ultimately fail.
"Given the significant amount of antitrust obstacles in both the United States and Europe, we do not believe Oracle's bid can be completed at any price," PeopleSoft said in statement.
PeopleSoft also said Oracle's timing of its announcement with the start of PeopleSoft's annual executive conference next week is further evidence of Oracle efforts to hurt PeopleSoft's business.
Oracle announced on Friday that it was extending the expiration date of its tender offer from June 25 to July 16.
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
TRANSFORMATION: Taiwan is now home to the largest Google hardware research and development center outside of the US, thanks to the nation’s economic policies President Tsai Ing-wen (蔡英文) yesterday attended an event marking the opening of Google’s second hardware research and development (R&D) office in Taiwan, which was held at New Taipei City’s Banciao District (板橋). This signals Taiwan’s transformation into the world’s largest Google hardware research and development center outside of the US, validating the nation’s economic policy in the past eight years, she said. The “five plus two” innovative industries policy, “six core strategic industries” initiative and infrastructure projects have grown the national industry and established resilient supply chains that withstood the COVID-19 pandemic, Tsai said. Taiwan has improved investment conditions of the domestic economy
Malaysia’s leader yesterday announced plans to build a massive semiconductor design park, aiming to boost the Southeast Asian nation’s role in the global chip industry. A prominent player in the semiconductor industry for decades, Malaysia accounts for an estimated 13 percent of global back-end manufacturing, according to German tech giant Bosch. Now it wants to go beyond production and emerge as a chip design powerhouse too, Malaysian Prime Minister Anwar Ibrahim said. “I am pleased to announce the largest IC (integrated circuit) Design Park in Southeast Asia, that will house world-class anchor tenants and collaborate with global companies such as Arm [Holdings PLC],”
MAJOR BENEFICIARY: The company benefits from TSMC’s advanced packaging scarcity, given robust demand for Nvidia AI chips, analysts said ASE Technology Holding Co (ASE, 日月光投控), the world’s biggest chip packaging and testing service provider, yesterday said it is raising its equipment capital expenditure budget by 10 percent this year to expand leading-edge and advanced packing and testing capacity amid strong artificial intelligence (AI) and high-performance computing chip demand. This is on top of the 40 to 50 percent annual increase in its capital spending budget to more than the US$1.7 billion to announced in February. About half of the equipment capital expenditure would be spent on leading-edge and advanced packaging and testing technology, the company said. ASE is considered by analysts