WASHINGTON (AFP) - After a bitter 18-month battle Oracle Corp has taken control of more than 60 percent of outstanding shares of rival business software group PeopleSoft.
In a letter, Oracle demanded that the PeopleSoft board of directors respect the decision of shareholders who chose to sell 228,702,471 shares to Oracle, the firm said in a statement issued overnight Friday to Saturday.
"The owners of PeopleSoft have spoken and have overwhelmingly chosen to sell to Oracle at 24.00 per share," said Oracle`s Chief Executive Officer Larry Ellison.
"We are prepared to enter into a definitive merger agreement as early as this weekend," said Ellison, calling for a meeting with PeopleSoft`s board.
Oracle launched its public purchase offer, now worth 9.2 billion dollars (7.1 billion euros), in June 2003. Control of PeopleSoft will make Oracle the world`s number-two maker of business software, a sector currently dominated by Germany`s SAP.
The offer was bluntly rejected by PeopleSoft and the two sides have had bitter exchanges in the 18 months since.
The Oracle letter also called on the board of PeopleSoft to lift obstacles it put into place in order to increase the cost of any hostile takeover.
Oracle pursued PeopleSoft to the courtroom to battle the "poison pill" tactics. The judge in charge of the case has not yet made up his mind but a hearing is expected next week.
In its letter Oracle once again extended its purchase offer, to 6:00 pm (2300 GMT) December 31, 2004.
Legally, PeopleSoft`s board of directors does not have to bend to the will of its stockholders and can take the showdown to the next annual meeting, in the second quarter of 2005, London`s Financial Times newspaper said Friday, citing a US expert on company governance.
But with a majority of PeopleSoft shares in its pocket, Oracle can take control of its board and the game will be up.
Neither firm would benefit from prolonging several more months a battle that has sucked up money and time.
"We believe it is time to bring this matter to a close, for the good of PeopleSoft`s shareholders, customers and employees," Oracle chairman Jeff Henley said Saturday.
"We are prepared to complete and pay for the acquisition of all of the outstanding shares of PeopleSoft upon satisfaction of the remaining conditions, which are all in the control of the PeopleSoft Board," Henley said.
In late October PeopleSoft`s management acknowledged that Oracle`s takeover attempt was hurting business.
Clients and potential clients worried that Oracle would drop some PeopleSoft products if it succeeded in swallowing its rival.
To sway them from gravitating to the competition, PeopleSoft offered reimbursement for up to five times the purchase price for each product whose maintenance or continued development could be discontinued in a takeover.
The firm was setting a trap for Oracle, which would be forced to pay between two billion and 2.5 billion dollars, according to analysts, if it abandons certain product lines to make the merger beneficial.
US antitrust regulators had sought to block Oracle`s bid, claiming it would hinder competition, but US District Judge Vaughn Walker rejected the government`s arguments on September 9.
The Justice Department had argued that Oracle, PeopleSoft and SAP are the only companies that develop and sell the high-end integrated human resource and financial management software used by big companies and government agencies.
Oracle bucked convention and court odds in defending itself against the suit. Typically corporations give up on takeover efforts if Justice Department lawyers deem they would be anti-competitive.
11/20/2004 - 16:38 GMT - AFP