November 2020 ~ Oracle v. Peoplesoft

Oracle vs. PeopleSoft

How they financial killed off the consultant

The Billionaires Pump and Dump with help from CalPers - then kill off the programmer and his relatives

Pete Bennett - Contractor Developer involved in Oracle v. PeopleSoft

Research Portal

The California Employees' Retirement System (Calpers) is tendering its 1.5 million PeopleSoft shares to Oracle, giving the hostile suitor a boost in the final days of its takeover bid.

Calpers' board voted on Wednesday afternoon to tender the shares, said spokesman Brad Pacheco. "Generally speaking, we just felt it made economic sense and it was a fair price," he said of the Calpers decision and Oracle's bid for PeopleSoft.

Oracle's final offer for PeopleSoft stands at $24 per share for all outstanding shares of its rival. That bid expires at midnight EST Friday, and that deadline has in recent days prompted a number of shareholders to tender their shares to Oracle, although Private Capital Management Inc., the largest PeopleSoft shareholder, has thus far refused to do that.

Calpers, based in Sacramento, is the largest U.S. pension fund, and while it is a relatively small PeopleSoft shareholder, its decision helps Oracle in its takeover attempt, and adds to the mounting pressure on other shareholders. Tendering shares does not mean that shareholders have to sell to Oracle at its bid price, but such action signals support for the takeover and further could motivate PeopleSoft's board to enter discussions with Oracle regarding the bid. However, as of Thursday rancor and anger continued to dominate in what has been an ongoing nasty back-and-forth between the companies.

Oracle Board Chairman Jeffrey Henley on Thursday issued a letter to PeopleSoft shareholders, telling them that it is time for them to decide if they want to accept Oracle's offer. The letter, posted at Oracle's Web site, is firm, direct and pointed.

"The PeopleSoft board has for 17 months acted to deny stockholders the opportunity to consider our offer," the letter says. "They have failed to deliver an alternative transaction to deliver value to stockholders, and seem determined to use the poison pill indefinitely to deny stockholder choice. They have responded to our $24 best and final offer in characteristic fashion: by attempting to change the subject and issuing what analysts have described as unobtainable financial projections."

A "poison pill" is a provision in company bylaws -- in this case, those of PeopleSoft -- that allows a company to manipulate its shares so that any attempt at a hostile takeover becomes prohibitively expensive.

PeopleSoft's board has rejected offers from Oracle over the 17 months since Oracle made its bid, including the standing $24 offer. Henley addressed that in his letter."This is not a new tactic for PeopleSoft," he wrote. "It is well understood that the financial guidance PeopleSoft issued in the third quarter of 2003 as a basis for rejecting Oracle's tender offer was unachievable at the time, and it has not been achieved. We suggest you consider this track record when evaluating what PeopleSoft's board is telling you now and in deciding whether to tender your shares."

He concludes: "We look forward to closing this transaction quickly. The choice is yours."

Undoubtedly, issues related to that "choice" will be discussed throughout Friday as time ticks away to the bid deadline.

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