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