Oracle vs PeopleSoft: who is going to win?

It is arguably the most sensational tech story of the year–and the Oracle’s
hostile takeover bid for PeopleSoft just refuses to fade from public memory.
From the day Larry Ellison made an offer to PeopleSoft shareholders, both
companies have fired many a shots in the fierce takeover battle that has ensued.

Oracle on its part revised the offer price per share within weeks of initial
price of $16 to $19.50–upping the effective acquisition cost from $5.1 billion
initially to $6.3 billion, and later to $7.5 billion (revalued to include
PeopleSoft-JD Edwards merger). The company has also extended the deadline for
PeopleSoft shareholders to tender their shares four times, the latest one
expires mid-October.

To prevent the takeover, PeopleSoft filed a lawsuit alleging that Oracle’s
true intentions were to hurt PeopleSoft’s business and disrupt the JD Edwards
buyout. The company’s management also has ready an anti-buyout provision known
as a "poison pill". Oracle in turn has filed a lawsuit to overturn the
provision.

The issue is also hanging partly as Oracle awaits regulatory clearance for
its offer. The US Department of Justice, which is reviewing the deal, will not
announce a final decision before November 2003. Regulators in the European Union
and Canada are also looking at the deal. Meanwhile, PeopleSoft has finished its
own acquisition of JD Edwards and expects the transaction boosting its bottom
line by the end of this fiscal. PeopleSoft CEO Craig Conway told a news website
in early September that he no longer takes Oracle’s bid seriously. "You
can extend the offer every 30 days until the end of time," Conway said.
"The saga is over. I don’t spend any time on it anymore." But Oracle
would not give up so easily. It’s planning to get around the hurdles in the
acquisition. As for the time, while the fizz may be dying, but it will be
another two-three months before the proverbial fat lady sings.

Rishi Seth, in New Delhi