The end may be in sight in the ongoing saga of Oracle's hostile takeover bid for embattled competitor PeopleSoft.
Earlier this week Oracle made what it called its "best and final offer" for PeopleSoft, raising its bid from US$21 to $24 per share and paring down the conditions it's stipulating for the deal. That puts the value of the new offer at $9.2 billion.
The enterprise software provider said the offer, which expires at midnight EST on November 19, would be its last bid for PeopleSoft.
Following the European Commission's decision not to block the proposed takeover and the US Department of Justice's failed bid to do so, Oracle called PeopleSoft's board of directors its only obstacle to shareholders considering its offer.
"The time has come to bring this matter to a conclusion by allowing the stockholders to decide," Oracle said in a letter to PeopleSoft's shareholders on Sunday.
Oracle said the new bid is a 60% premium on the price of PeopleSoft's stock prior to its offer. "We believe it represents a substantial premium to the price at which those shares would trade were it not for our offer," Oracle said in its letter.
Oracle also said it is dropping many conditions from its offer but is keeping its demand that PeopleSoft's board eliminate the company's so-called poison pill provisions.
In a conference call with investors on Monday, Oracle executives outlined how they plan to proceed in the next several weeks.
Oracle intends to work with both its and PeopleSoft's shareholders to sell them on the benefits of the deal, said chief financial officer Harry You. "I think that clearly is going to be the most important activity here through November 19," he said.
If less than 50% of PeopleSoft's outstanding shares remain untendered by the deadline, Oracle will withdraw its bid. If by that time Oracle has a majority of the PeopleSoft stock and the PeopleSoft board redeems the poison pill, then Oracle will proceed with the merger.
Barring that, said chairman Jeff Henley, Oracle will attempt to litigate the anti-takeover provision out of existence in a Delaware court. If the board remains hostile to the offer, then Oracle will take the case directly to the PeopleSoft shareholders.
Although Oracle in the past has hinted that it would largely cease active development of the PeopleSoft portfolio, Henley also discussed plans for a next-generation suite of applications dubbed "PeopleSoft 9". He indicated that it would be more than just a "maintenance" upgrade, and that it would actually contain some "new functionality and so forth", but the company would not be "actively marketing" it.
Bruce Richardson, an analyst at consultancy AMR Research, cautioned that this in fact may not be the end of the story. Both companies are still due in court in Oakland, California in January for a trial over PeopleSoft's allegations of unfair business practices by Oracle. Moreover, Oracle may yet make another last best bid should the PeopleSoft board reject this one as too low.
Richardson also suggested that PeopleSoft 9 would most likely resemble Oracle's own E-Business Suite 11i.
For its part, PeopleSoft's board issued a statement urging investors to take no action at this time on the offer, and that directors intends to meet and review it.