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Hostile Takeover

Oracle began a hostile takeover attempt of PeopleSoft in 2003 by making a $13 billion bid. After the bid was rejected, Oracle lowered its bid but the Justice Department attempted to block the acquisition on antitrust grounds. In 2004, Oracle increased its bid to $10.3 billion and acquired PeopleSoft, but then cut over half of PeopleSoft's workforce. Oracle rebranded some of PeopleSoft's products under its own name and plans to merge the best of PeopleSoft, JD Edwards, and Oracle software into a new product suite called Fusion Applications.
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0% found this document useful (0 votes)
237 views3 pages

Hostile Takeover

Oracle began a hostile takeover attempt of PeopleSoft in 2003 by making a $13 billion bid. After the bid was rejected, Oracle lowered its bid but the Justice Department attempted to block the acquisition on antitrust grounds. In 2004, Oracle increased its bid to $10.3 billion and acquired PeopleSoft, but then cut over half of PeopleSoft's workforce. Oracle rebranded some of PeopleSoft's products under its own name and plans to merge the best of PeopleSoft, JD Edwards, and Oracle software into a new product suite called Fusion Applications.
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We take content rights seriously. If you suspect this is your content, claim it here.
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ORACLE AND PEOPLESOFT

Hostile Takeover
Corporate Finance
Poenaru Alexandru

The hostile takeover of PeopleSoft by Oracle


Beginning in 2003, Oracle began to maneuver for control of the PeopleSoft
company. In June 2003, Oracle made a $13 billion bid in a hostile
corporate takeover attempt. In February 2004, Oracle decreased their bid to
approximately $9.4 billion; this offer was also rejected by PeopleSoft's board
of directors. Later that month, the U.S. Department of Justice filed suit to
block Oracle, on the grounds that the acquisition would break antitrust laws. In September 2004, the suit was rejected by a U.S. Federal judge,
who found that the Justice Department had not proven its anti-trust case. In
October, the same decision was handed down by the European Commission.
Though Oracle had reduced its offer to $7.7 billion in May, it again raised its
bid in November to $9.4 billion.
In December 2004, Oracle announced that it had signed a definitive merger
agreement to acquire PeopleSoft for approximately $10.3 billion. A month
after the acquisition of PeopleSoft, Oracle cut over half of PeopleSoft's
workforce, laying off 6,000 of PeopleSoft's 11,000 employees.
Oracle moved to capitalize on the perceived strong brand loyalty within the
JD Edwards user community by rebranding former JD Edwards products.
Thus PeopleSoft EnterpriseOne became JD Edwards
EnterpriseOne and PeopleSoft World became JD Edwards World.
Oracle has announced that a new product, Fusion Applications, is to be
released in the near future. Oracle says Fusion will take the best aspects of
the PeopleSoft, JD Edwards and Oracle Applications and merge them into a
new product suite.

Comments:
Oracle wanted to consolidate their position in the software industry.
Acquiring PeopleSoft, meant that there would be only two big companies
that provide software for financial, human-resources and other business
functions, Oracle and SAP.
Oracle needed PeopleSoft to bolster its business-applications business,
which trailed both SAP and PeopleSoft.

Oracle signaled that it was more interested in PeopleSoft's list of customers


than its technology or executives.

References:
1. http://online.wsj.com/articles/SB110293586982698273
2. "PeopleSoft Inc.- Company Profile, Information, Business Description,
History, Background Information on PeopleSoft Inc."
3. "Oracle to PeopleSoft: The pink slip's in the mail"

How can you do it:


In a hostile takeover, the target company's board of directors rejects the
offer, but the bidder continues to pursue the acquisition.
A bidder may initiate a hostile takeover through a tender offer, which means
that the bidder proposes to purchase the target company's stock at a fixed
price above the current market price. Another method of hostile takeover is
acquiring a majority interest in the stock of the company on the open
market.

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