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Mergers & Acquisitions: Article

PeopleSoft Looks Like It Wants Oracle to Ante Up More

PeopleSoft Looks Like It Wants Oracle to Ante Up More

Well, here we are three weeks into Oracle's bid to acquire PeopleSoft and, unless some miracle has happened on the sly, nobody's talked to anybody yet. Unless you call the PeopleSoft board's preemptory and unanimous rejection of Oracle's sweetened $6.3 billion offer as piddling talking.

Or PeopleSoft hiring Gary Reback, the former Wilson Sonsini partner, who put the Microsoft antitrust suit in train, to go put a stick through Oracle's wheel.

Now with Carr & Ferrell, after a spell as CEO of a start-up telephony outfit, Reback can go churn up a lot a dust with Connecticut and whatever other states - like maybe Texas and California - Connecticut can entice into suing Oracle for antitrust using the same arguments he used against Microsoft.

"Same playbook. Same plays. Different players," he told the Wall Street Journal, describing Oracle's move as "the last gasp of a dying database empire" and "a bet-your-company move to protect your core franchise." He's saying it's a way of forcing PeopleSoft customers who use IBM or Microsoft's database on to Oracle, akin to Microsoft maintaining its monopoly against Netscape.

Remember, PeopleSoft cried antitrust the moment Oracle made its initial $5.1 billion offer. It will be telling whether the Justice Department asks for more information on Monday about the competitive impact of the deal.

PeopleSoft has also indicated its open to a white knight bid though it claims it's got no negotiations going on. Possibilities, if someone was willing to better Oracle's existing offer, are said to include Microsoft, IBM, HP, SAP and Siebel. None are very likely.

Meanwhile, Oracle has had to soften its rhetoric about shutting down PeopleSoft's software - saying the whole notion is "lies and scare tactics" - though that's what Larry Ellison originally said. Oracle is now talking about developing the stuff for the next 10 years - or "even longer" and swearing it won't force anybody to convert to its software and pledging to support PeopleSoft software for longer that PeopleSoft has committed to.

Oracle hasn't said yet that it won't fired half the company if it gets the chance.

As we predicted, Oracle may have to go higher. Even Larry Ellison hinting around about that, even though he's describing his latest offer as "fully valued and fair." Ellison also dropped his objections to the changes PeopleSoft and JD Edwards made in the terms of their proposed $1.75 billion merger last week, hoping the waiver would be a way to get in to talk to the PeopleSoft board. When PeopleSoft and JDE changed the ground rules, PeopleSoft stockholders lost the opportunity to vote on the deal, making it harder for Oracle, which still needs PeopleSoft to drop its poison.

PeopleSoft and JDE figure if they can get hitched quicker than Oracle can get a court decision PeopleSoft will evade capture. In fact, Oracle, citing concerns about competing with Microsoft, is now making noises about acquiring both of them, which would raise the price. There's also talk of more acquisitions by Oracle to get more products and more distribution channels in the air.

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More Stories By Maureen O'Gara

Maureen O'Gara the most read technology reporter for the past 20 years, is the Cloud Computing and Virtualization News Desk editor of SYS-CON Media. She is the publisher of famous "Billygrams" and the editor-in-chief of "Client/Server News" for more than a decade. One of the most respected technology reporters in the business, Maureen can be reached by email at maureen(at)sys-con.com or paperboy(at)g2news.com, and by phone at 516 759-7025. Twitter: @MaureenOGara

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