Oracle cuts PeopleSoft offer to US$7.7 billion

Oracle has reduced its offer to acquire PeopleSoft to US$21 per share, or approximately US$7.7 billion, in order to bring the offer in line with the reduced value of PeopleSoft's shares, Oracle said Friday.

The offer represents a premium of 21 percent over PeopleSoft's closing share price Friday of US$17.30, Oracle Chairman and Chief Executive Officer Jeff Henley said in a statement. The previous offer was for US$26 per share, or approximately US$9.4 billion.

The revised offer "reflects changes in market conditions and in PeopleSoft's market valuation," Henley said in the statement.

The database vendor has also once again extended its acquisition offer, this time to July 16. The offer had been set to expire June 25.

At the close of business Friday, 7.9 million PeopleSoft shares had been tendered for the offer and not withdrawn, Oracle said. That's down from about 12.4 million tendered shares in December, and about 43.8 million in July last year. PeopleSoft had 364 million outstanding shares as of Feb. 26, according to a regulatory filing.

Oracle launched its campaign to acquire PeopleSoft last June, when it submitted to PeopleSoft's shareholders an unsolicited US$5.1 billion bid for control of the company.

At the time, PeopleSoft's shares were trading at slightly more than US$15. Their value climbed to about US$24 at the start of the year but has since declined as regulators in both the U.S. and Europe moved to block the deal.

The U.S. Department of Justice has sued to prevent the merger on the grounds that it would stifle competition in the market for enterprise business applications. That case is set to begin trial June 7.

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