Oracle Bid Once Again Rejected

Although the holders of a majority of PeopleSoft's shares voted in favor of Oracle Corp.'s $9.2 million takeover bid, PeopleSoft's board once again rejected Oracle's offer.

Oracle's bid recieved support from from holders of nearly 61% of PeopleSoft's shares.  Regardless of the support from the shareholders, Oracle was unable to take possession of the shares due to PeopleSoft's refusal to lift its poison pill provision.  If Oracle were to take posession of the shares the provision would flood the market with newly issued shares, diluting Oracle's ownership stake and making acquisition of PeopleSoft pohibitively expensive.  PeopleSoft has expressed a willingness to lift the poison pill, but only if the price is right.

In order to prevail now, Oracle must either raise its $24-a-share bid, proceed with what would likely be a lengthy proxy battle or get help from the Delaware judge ruling on the legality of PeopleSoft's poison-pill antitakeover defense.  Of course, at the rate things have been going, Oracle is also probably seriously considering just walking away and seeking out other acquisitions.  In an efffort to avoid that from becoming necessary, Oracle has extended its deadline for the $9.2 million offer to December 31.