It is looking increasingly likely that Oracle could be victorious in its lengthy takeover battle with PeopleSoft. Steven Goldby, a PeopleSoft director giving his second day of testimony in the case of Oracle versus PeopleSoft in Delaware yesterday, reportedly said he was open to entering into takeover talks.
Indications emerged yesterday that PeopleSoft may be more open to friendly merger talks.
Mr Goldby reportedly said that if Oracle is willing to pay the right price for shareholders and there is a high certainty of being able to close a transaction quickly then he would be open to discussions with Oracle. The comments came during a trial in which Oracle is trying to have PeopleSoft’s poison pill shareholder rights plan overturned. This is still one of the most significant barriers it has to overcome before it can complete any deal.
Mr Goldby, sitting on the board of directors and answerable to shareholders, does of course have a fiduciary duty to entertain realistic offers for the company. PeopleSoft in the past however has been adamant that price was not the object.
Under the watch of CEO Craig Conway, who was fired Friday, PeopleSoft said in May: Given the significant antitrust obstacles in both the United States and Europe, we do not believe Oracle’s bid can be completed at any price.
The antitrust obstacles in the US have of course dissolved. Last week the US Department of Justice said it will not appeal a court ruling that agreed with Oracle that the planned acquisition was not anticompetitive under US law. The European Commission has a recent track record of being more aggressive in enforcing its antitrust laws, but has not yet revealed its position on any Oracle-PeopleSoft deal. SAP, the biggest competitor of both firms, is based in the EU.
Oracle is offering $21 for each PeopleSoft share. That’s lower than both yesterday’s PeopleSoft closing price of $22.83 and lower than the $26 Oracle was offering earlier this year, before revising the price down to reflect PeopleSoft’s fortunes.
PeopleSoft also yesterday denied rumors that its new management team, led by founder Dave Duffield, has already visited Oracle to talk about a deal, as first reported by Prudential Equity Group, which apparently later retracted its report.
Since Oracle first launched its unsolicited takeover bid last year, PeopleSoft management has consistently refused to meet Oracle executives, providing Oracle with much frustration and a nice chunk of public relations capital.