PeopleSoft Inc appears determined to repel Oracle Corp's takeover advances, even if it means alienating shareholders who want to accept the US$9.2 billion offer currently on the table.
The business software maker's board of directors delivered the latest rebuff to its bitter rival Wednesday when it announced its unanimous decision to reject a US$24-per-share bid as inadequate. What's more, the board signaled it is prepared to continue its staunch resistance, no matter how shareholders might feel about the offer.
"We absolutely believe PeopleSoft is worth far more today than at any point since this process began," said George "Skip" Battle, the lead director on PeopleSoft's transaction committee.
Many analysts disagree with that assessment, saying PeopleSoft's market value has been propped up by Oracle's takeover bid. If Oracle withdraws its bid, some analysts fear PeopleSoft's stock will plunge by more than 30 percent.
PeopleSoft's shareholders theoretically could override the board's recommendation by offering their shares to Oracle by a Nov. 19 deadline.
Should a shareholder majority side with Oracle, Battle and other board members said the directors still intend to use whatever measures necessary to force the issue to a final vote at PeopleSoft's annual meeting next spring.
If a majority of shareholders don't accept the bid by the Nov. 19 deadline, Oracle says it will take its offer off the table and begin shopping around for other acquisitions.
"Oracle has been at this for a year and half and it is now time to bring this matter to a close," said Oracle CEO Larry Ellison. "On Nov. 19, we will respect the will of the shareholders."
Battle left the door open for friendly negotiations, but only if Oracle pushes the bidding beyond US$26 per share -- the highest previous offer in the odyssey. "We are not going to sell PeopleSoft for less than it's worth," Battle said during a Wednesday interview.
Redwood Shores-based Oracle insists it won't raise the stakes, maintaining PeopleSoft's sales prospects have deteriorated significantly since the beginning the year.
PeopleSoft tried to reverse the tables on Oracle Wednesday, asserting its rival is struggling to sell business applications software -- the computer coding that automates a wide range of administrative tasks.
Oracle's sales of application software licenses declined 36 percent in its latest quarter while PeopleSoft's rose slightly. PeopleSoft expects next year to be even stronger. The company told analysts during a Wednesday conference call that earnings next year will range from US$0.82 to US$0.87 per share, topping the current mean estimate of US$0.77 per share among analyst polled by Thomson First Call.