If the Oracle-PeopleSoft trial in Delaware started out last week sounding like the courtroom was being used as a negotiating table for the increasingly likely merger, nothing much changed when Oracle CEO Larry Ellison took the stand Friday.
Following Thursday testimony from one of his directors that suggested Oracle was prepared to revise its $7.7bn bid to secure the support of PeopleSoft’s shareholders, Ellison said Friday that Oracle was more inclined to lower the bid.
Ellison reportedly testified that Oracle has had more discussions about lowering price than raising the price since the hostile takeover bid was launched in June 2003. But he also said that buying PeopleSoft is very, very important for Oracle’s future.
PeopleSoft shares were down slightly yesterday, but still trade above the $21 per share that Oracle is offering. At the last count, only about 3% of PeopleSoft’s shares had been tendered to the offer and not withdrawn.
The case sees Oracle trying to persuade the court to overturn two obstacles to the deal PeopleSoft’s poison pill shareholder rights plan and its controversial Customer Assurance Program, which would saddle a hostile acquirer with refund liabilities.
Because the two companies have not sat down at the negotiating table (they say) since the battle was joined, discussions have been carried out via the media, regulatory filings, press releases and court appearances.
The Delaware case is not an exception. A PeopleSoft director testified frankly early last week that the company is open to an acquisition at the right price and right speed. An Oracle director then testified that $21 may not be the last offer.
Since the offer was launched, it has been revised three times from $16 to $19.50 to $26 then down to $21. Meanwhile, PeopleSoft’s share price has fluctuated as the impact of Oracle uncertainty made its sales less predictable.
