PeopleSoft is amending its agreement to purchase J.D. Edwards & Co., in an effort to speed up the transaction in the face of moves by rival Oracle to buy PeopleSoft.
The amended agreement, announced Monday, is valued at approximately US$1.75 billion in cash and newly issued PeopleSoft stock. The prior agreement was an all-stock deal valued at $1.7 billion.
Under the new deal, J.D. Edwards shareholders will be able to elect to receive cash or stock for their J.D. Edwards shares, based on the June 13 closing price of PeopleSoft's common stock of $16.92 a share.
PeopleSoft said the exchange offer will commence shortly. Upon completion of the exchange offer, all remaining shares of J.D. Edwards will be acquired in a second-step merger. The companies expect the transaction to close in the third-quarter of this year.
In a statement released Monday, PeopleSoft President and Chief Executive Officer Craig Conway said that the amended agreement would excel the benefits to PeopleSoft's shareholders.
The agreement is just the latest twist in the merger soap opera affecting the enterprise application market, which was set off 10 days ago when Oracle announced that it was moving to acquire PeopleSoft, just days after the company signed an agreement to buy J.D. Edwards.
Oracle's unsolicited $5.1 billion bid put the J.D. Edwards buy in jeopardy, since the deal was not yet closed. If Oracle scooped up PeopleSoft, it could reconsider the J.D. Edwards buy.
Both PeopleSoft and J.D. Edwards have lashed out against the Oracle bid, with the software provider filing two lawsuits against Oracle last Thursday, claiming that the company "tortiously interfered" with its proposed merger.
In a statement released Monday Oracle criticized the accelerated merger plan, saying that it was an attempt to take away the shareholders' vote.
"If you consider that PeopleSoft and J.D. Edwards put together the best financing approach when they announced their original merger, this sub-optimal approach can only be a ploy to preserve management’s self-interest," Oracle spokesman Jim Finn said in the statement.
"This move does not deter Oracle and our offer remains before shareholders," he added.