 |
|
|||||||
|
||||||||
By
To call Larry Ellison brash is about as obvious as calling Funny Cide the fan favorite for this weekend's Belmont Stakes. And yet, with today's unsolicited bid for PeopleSoft (Nasdaq: PSFT), Oracle (Nasdaq: ORCL) and its charismatic leader's gall are again raising some eyebrows. Just this past Monday, PeopleSoft announced that it would be buying smaller rival J.D. Edwards (Nasdaq: JDEC) for $1.7 billion in stock. The combination of the two companies would have catapulted them ahead of Oracle, to take over the No. 2 spot in the enterprise-applications software market. PeopleSoft had hoped to close the deal this fall. That was apparently enough to spur Ellison and crew to action. Oracle offered $16 in cash per share this morning in what amounts to a $5.1 billion hostile bid for PeopleSoft. According to Ellison, PeopleSoft CEO Craig Conway talked to him last year about combining the two companies' business software units, but a structure for the deal couldn't be agreed on. As of press time, PeopleSoft was still formulating a public response to Oracle's offer. Ellison sent a letter to PeopleSoft's board, informing them that he'd like to discuss the bid. However, Oracle is moving ahead quickly and will start its tender offer for shares this coming Monday. With PeopleSoft shares jumping to $18 and change today, Oracle may have to sweeten its bid to convince shareholders. The big loser here may end up being J.D. Edwards, which is exactly as Oracle wants it. Assuming Oracle completes the PeopleSoft acquisition, it could then prevent the J.D. Edwards deal. Oracle discreetly pointed to this possibility in its press release announcing the bid. Ellison himself would later allude to it in a conference call. He called the PeopleSoft/J.D. Edwards deal "a very risky merger" and said that Oracle's $16 offer is a "much safer road for the PeopleSoft shareholder." In a nod to what a CEO should say in order not to appear so hostile, though, Ellison said of the J.D. Edwards deal, "... We are certainly interested." Yeah, right. Does Oracle really want PeopleSoft? Or does it just want to prevent the merger of two rivals that would surpass it once combined? Doubting Oracle's motivations here isn't unfounded. Oracle shareholders can't feel good, though, about what appears to be a very impetuous (and expensive) move. But then again, that's what you get when Larry Ellison's at the helm of your company.
RSS Headlines
Fool UK
