Oracle Tuesday reiterated that it will continue its efforts to acquire rival software vendor PeopleSoft in a hostile US$6.3 billion takeover bid, even after PeopleSoft amended its own merger proposal last week with J.D. Edwards & Co.
In an announcement, Oracle said that under its original offer to buy PeopleSoft, there was a condition that the purchase would be made only if PeopleSoft and J.D. Edwards didn't modify their existing merger plans.
Last week, PeopleSoft and J.D. Edwards amended their merger plans in an effort to speed up the transaction in the face of moves by Oracle to buy PeopleSoft. The amended agreement 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.
Those changes forced Oracle Tuesday to waive its original "no changes" condition so its offer could stay in place, according to the company.
"Although we have provided this waiver, we continue to view the amended merger agreement as an unlawful device to deprive PeopleSoft shareholders of their right to vote with respect to the J.D. Edwards merger," Oracle spokesperson Jim Finn said in a statement. "The condition we have now waived was identified by the PeopleSoft board of directors as an important reason in declining to pursue discussions with us. We hope that with this waiver, PeopleSoft will finally agree to meet with us, as their shareholders are demanding."
Steve Swasey, a spokesman for Pleasanton, Calif.-based PeopleSoft, said "removing the waiver means nothing."
"Oracle is just blowing smoke again," Swasey said.
Meanwhile, representatives of the Texas and California attorneys general are participating in a conference call Tuesday to discuss possible antitrust implications of Oracle's takeover bid.
Tom Dresslar, a spokesman for California Attorney General Bill Lockyer, and Tom Kelley, a spokesman for Texas Attorney General Greg Abbott, both confirmed that the call is taking place, but stressed that such preliminary conference calls are routine as state governments look at business transactions and their potential effects.
"Our office has not taken any legal action to block the proposed takeover, but we are watching the developments closely," Kelley said. "We take great interest anytime a situation threatens competition and puts the customer, whether an individual or government entity, in jeopardy of paying higher prices for a particular product."
Dresslar said California is so far monitoring the developments but has "no plans at this time to intervene."
Last week, Connecticut filed an antitrust lawsuit against Oracle because the state is in the midst of a $100 million PeopleSoft project. Connecticut Attorney General Richard Blumenthal filed suit in U.S. District Court in Hartford, alleging that a takeover of PeopleSoft would violate state and federal antitrust laws and damage the state by causing "an enormous and expensive upheaval" of its ongoing project.
State and federal governments are major customers of PeopleSoft software used to manage operations and human resources. Some agencies have voiced fears about any move by Oracle to halt development of new PeopleSoft products.
Both sides once again Tuesday ran full-page advertisements in major U.S. financial newspapers arguing their positions.
Oracle sought to soothe customers with a checklist of commitments to preserve existing PeopleSoft products.
"They're backpedaling clearly because customers are outraged," said PeopleSoft's Swasey.
Oracle made its unsolicited bid for PeopleSoft on June 6 , just four days after PeopleSoft announced its planned merger with J.D. Edwards. The PeopleSoft-J.D. Edwards merger would propel the company past Oracle in sales of business applications.