Go ahead and admit it. You've flirted before. You may have even been the subject of a naughty little striptease. Heck, maybe most of us have. That's at least the subliminal message of Disney's
This week, Oracle
Of course, this game of hard-to-get is more than a flirtation. Oracle is proposing a complete buyout of PeopleSoft. The combined OracleSoft could become a formidable entity in the business software market, presenting a stiff challenge to market leader SAP
I understand the approach, of course. Frankly, Oracle has no choice but to pursue this course because Catz and Ellison are both right. PeopleSoft's results have been dismal lately. This quarter's upbeat guidance doesn't change that. Indeed, the company still trades at a hefty 28 times its expected earnings and 22 times its free cash flow. By contrast, Oracle trades for 18 times its expected earnings and 17 times its free cash flow. For a poorly performing firm, PeopleSoft is premium-priced.
So far, PeopleSoft has expressed no public reaction to the comments. But that doesn't mean retaliation isn't in the works. A Securities and Exchange Commission filing this morning shows the firm has extended its highly controversial customer assurance program, which promises big rebates if there is an acquisition.
There is also a chance that the board will decide it can find a better mate that will treat it with the love and respect it deserves. Microsoft
At least one thing is clear: If Ellison and team do convince PeopleSoft to accept a more modest proposal, then they will have to come to the altar with flowers, candy, and an apology at the ready.
For more on the OracleSoft affair:
- A courtroom confession reveals why a former PeopleSoft CEO was sacked.
- Oracle won the other courtroom contest, which is why we're still talking about this.
- Maybe Ellison needs to reread his company's latest quarterly results to fall back in love with PeopleSoft.