The PeopleSoft vs.

Oracle clash

A Register History
The tale of Oracle's attempt to buy Peoplesoft is a story of Larry Ellison's relentless
pursuit of his target in the face of implacable hostility from the PeopleSoft board. The
slanging matches between then-PeopleSoft-CEO Craig Conway and Oracle's Ellison
were often spectacular. Conway once described Oracle as a "sociopathic company", later
having to deny that this meant he'd called Ellison a sociopath. A fine point, perhaps, but
indicative of just how bitter and personal this fight became. Certainly here at The
Register we mourn the passing of the greatest clashes of modern corporate times.
- Hostility (n) sự thù địch(mang ý đồ xấu)
- Spectacular(adj) ngoạn mục
- Sociopathic (adj) bệnh xã hội
- Deny(v) phủ nhận
- Indicative(adj) biểu thị
-
Timeline
It all kicked off on 6 June 2003, when Oracle ambushed PeopleSoft with a hostile
takeover bid. The $5.1bn offer came just days after PeopleSoft agreed a $1.7bn deal with
JD Edwards. By 18 June, Oracle had upped this to $19.50 per share. PeopleSoft
responded by sweetening its all-share deal with JD Edwards to include cash, in the hopes
of closing more quickly. Along with JD Edwards, the company began legal action against
Oracle, alleging Ellison and co. were deliberately disrupting the merger.
As part of its defense against being acquired, PeopleSoft pledged to give its customers
between two to five times their license fees back, following a takeover. Things started
looking even better for Conway when, as June came to an end, the US Department of
Justice (DoJ) started an investigation to determine whether Oracle should be allowed to
buy PeopleSoft.
On 18 July, PeopleSoft and JD Edwards completed their merger. By November, however,
Oracle had gone on the offensive again. It initiated legal action in Delaware to get the so-
called poison pill removed.
- kicked off(v) bắt đầu
- ambushed (v) phục kích(bất ngờ)
- hostile(adj) thù địch
- takeover(n) tiếp quản
- bid (n) nỗ lực
- share (n) cổ phiếu
- sweetening(v) làm dịu
- cash(n) tiền mặt
- alleging(v) cáo buộc
- deliberately(adv) cố tình
- disrupting
- defense(v) bảo vệ
 - acquired(v) mua lại
- pledged to(v) cam kết
- hostile takeover: mua lại bằng mọi giá
- poison pill(n) trong hoàn cảnh hostile takeover

Antitrust
The antitrust case pitted Oracle against the DoJ. The Department finally filed a suit to
block the deal (by this time worth a cool $9.4bn) in February 2004. It described the deal
as "anti competitive, pure and simple". The European Commission agreed, and made its
objections known in March 2004.
In April 2004, PeopleSoft reported lower than expected results, and by mid-May Oracle
had dropped its offer from a high of $26 to $21 per share. PeopleSoft still wasn't
interested.
Microsoft unexpectedly came to Larry Ellison's aid, when it emerged that the company
had been seriously considering an acquisition of SAP. Oracle said this proved it was
going to face tougher competition in the future, and that it should therefore be allowed to
buy PeopleSoft. In his evidence, Ellison said that if the acquisition was blocked, it would
have been a waste of a "tremendous amount of time and energy".
As the trial rumbled on, PeopleSoft announced another poor quarter on 7 July. It laid the
blame for its falling sales squarely with Oracle.
Six weeks after hearing closing arguments in the antitrust trial, on 10 September, Judge
Vaughn Walker handed Oracle a stunning victory. He ruled that the merger of Oracle and
PeopleSoft would not be anti- competitive. PeopleSoft responded by giving its staff
bigger and better severance packages, making itself an even more expensive proposition.
- Antitrust(a) chống độc quyền
- Pitted(v) đọ sức
- filed a suit ( v) đệ đơn kiện
- made its objections (v) phản đối
-

Europe says OK
In late September, rumors begin to circulate that the Eurocrats was preparing to green-
light the merger. The Financial Times reported that competition commissioner Mario
Monti would give the deal the go-ahead, before stepping down from his role.
Then, on 1 October, in a move that surprised everyone, the PeopleSoft board fired
Conway. It has lost confidence in his leadership. The board later claimed Conway had
misled analysts about the impact Oracle's bid would have on PeopleSoft's performance.
This effectively sounded the death knell for PeopleSoft's battle to remain un-Oracled, and
any remaining doubters were silenced when, on 26 October, Commissioner Monti
officially approved the merger.
However, PeopleSoft founder Dave Duffield proved no pushover. Despite a majority of
shareholders voicing support for the offer, he rejected Oracle's "best and final" bid of $24
per share, saying it undervalued the company.
On the steps of the courthouse
On 25 November, Judge Leo Strine of the Delaware court said he needed to hear more
evidence before ruling on the poison pills, specifically why PeopleSoft's board turned
down the offer of $24 per share. He said the hearing would take place on 13 or 14
December. Meanwhile, Oracle maintained the legal pressure on its prey to drop the
poison pills it had installed. It also pledged to "over support" PeopleSoft's customer base,
dismissing suggestions that it would drop JD Edwards product lines. It promised to
provide full support for PeopleSoft products until 2013.
But as the day of the new hearing dawned, the companies announced that they had come
to terms, and the deal was done. Oracle eventually agreed to pay $26.50 per share for
PeopleSoft. This values PeopleSoft at about $10.3bn: a ten per cent premium on the
company's closing value.
In a statement issued this morning, the appropriately named PeopleSoft chairman, George
Battle, described the fight for his company as "long and emotional". He said: "After
careful consideration, we believe this revised offer provides good value for PeopleSoft
stockholders and represents a substantial increase in value from October."
Both lawsuits have been suspended, and will be dropped when the merger is finalized, the
companies said. Ellison said he expected the deal to close in January, adding that it would
add about one cent per share to Oracle's Q4 results, and around two cents per quarter in
its 2006 financial year.

1. What was Peoplesoft’s response to Oracle’s hostile takeover?

A. Peoplesoft fired its CEO Craig Conway.
B. Peoplesoft installed the so-call poison pill.
C. Peoplesoft received aid from Microsoft.
D. People refused the deal with JD Edwards.
2. What happened in the first Antitrust Court between Oracle and Peoplesoft?
A. The deal is considered as simple and competitive.
B. The European Commission agreed with Oracle’s point of view.
C. The European Commission made objections with Peoplesoft’s case.
D. Peoplesoft won the first court.

3. One of the reasons leading to the sale of Peoplesoft is that:

A. The court ruled that the merger of Oracle and PeopleSoft would be anti-
competitive.
B. Peoplesoft reported lower than expected result and falling sales.
C. After Conway was fired, the founder Dave Duffield proved to be a pushover.
D. Oracle initiated legal action to get the so-called poison pill removed.

Four functional area : financial

Economic impact
Resistant to change