Oracle has raised its bid for Peoplesoft, again. The offer price now stands at $26 per share,a premium of more than $4 on the closing price on Nasdaq on Tuesday, and valuing its target at $9.4bn. This latest offer, which Oracle claims will be its last, is also above the highest value seen in the company in the last year.
The previous offer of $19.50 was well below the trading price of the shares, which hit a 52 week high of $24.04 last month. This price hike may make the bid more difficult for voting shareholders at Peoplesoft to turn down, but is likely to be seen as a heavy burden to carry by the Oracle investors.
Last week, Craig Conway, Peoplesoft’s CEO, said he still believed the bid would be blocked by the antitrust authorities. He also brought forward the company's annual shareholder meeting to late March in what is seen as an effort to disrupt the hostile takeover bid.
Clive Longbottom, head of research at UK analyst house QuoCirca, said that Oracle is not doing itself any favours. “Doing things like trying to get rid of Craig Conway and trying to install its own directors on the board is silly,” he argues. "That kind of behaviour gets noticed by everyone, including the regulators."
“There are plenty of people in the market who like the way Peoplesoft does business and would rather see it remain a separate entity. I think that many of the Peoplesoft shareholders consider that the company has a future in its own right. Then consider the Oracle shareholders. Even if the bid does get regulatory approval, I think they will see it as too high a price to pay to get rid of the competition.”
The US Department of Justice' Antitrust Division and the European Commission are investigating the bid on competition. A decision from the US is expected in March but the EU commission, traditionally a tougher nut to crack, could take much longer.
Oracle says it expects a decision regarding antitrust approval from the Department of Justice before March 12, and has extended the tender offer for all of the common stock of PeopleSoft to midnight EST of that day. The previous offer was set to expire at midnight EST on Friday, February 13, 2004.®