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Wed, Oct 15, 2003 - Page 12 News List

Oracle chairman maintains watch for takeover prey


Oracle Corp Chairman Larry Ellison told shareholders Monday the business software maker remains on the prowl for other takeover prey as it continues to stalk rival PeopleSoft Inc.

Responding to a question at Oracle's annual shareholders' meeting, Ellison acknowledged mulling a bid for struggling computer maker Sun Microsystems Inc before concluding it would be a bad idea to expand into the hardware business.

"I don't think we will acquire Sun or any other hardware company," Ellison said. But Ellison emphasized Oracle's appetite for acquisitions won't be satisfied even it manages to devour PeopleSoft in a proposed deal currently valued at US$7.5 billion.

"As the industry matures and we grow larger and larger, we will have to grow through a combination of developing new products and buying other companies," Ellison said. He didn't identify any potential candidates.

Pleasanton-based PeopleSoft has already rejected Oracle's US$19.50-per-share offer, which has been put on hold while the US Department of Justice completes an antitrust review of the proposed combination.

Oracle expects the government inquiry to be wrapped up next month or in December, chief financial officer Jeff Henley told shareholders.

With PeopleSoft's stock recently trading above Oracle's bid, analysts believe the offer will have to be raised. As of last week, only 6 percent of PeopleSoft's shares had been tendered to Oracle. PeopleSoft's shares gained US$0.17 to close at US$20.72 Monday on the NASDAQ Stock Market.

Oracle will abandon the bid if PeopleSoft becomes too expensive, Henley stressed.

"We need to make sure it's done at the right price so it's a good thing for our business and shareholders," he said.

Takeover talk was just one of several topics covered during Oracle's two-hour annual meeting, held at its Redwood Shores annual meeting.

Oracle is discussing alternatives to stock options as political pressure mounts for an accounting change that would force companies to expense the popular employee awards, said Michael Boskin, who heads up the company's compensation committee.

Boskin, a Stanford University economics professor, didn't provide specifics, other to say other "equity vehicles" are under consideration.

Oracle had 482 million employee stock options outstanding as of Aug. 31. Had Oracle expensed stock options in its last fiscal year ended in May, the company estimated it would have earned US$1.98 billion instead of it reported profit of US$2.31 billion.

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