"The PeopleSoft board unanimously voted to hold its annual meeting on March 25, so that we could put Oracle's apparent efforts to interfere with our business behind us as soon as possible," PeopleSoft president and CEO Craig Conway says in a statement. "We firmly believe that Oracle is trying to deny PeopleSoft stockholders the real value of this company."
PeopleSoft's board also nominated four existing directors to remain on the board: Conway; George "Skip" Battle, former CEO of Internet search-engine company Ask Jeeves; Frank Fanzilli, Jr., former CIO at Credit Suisse First Boston; and Cyril Yansouni, former Read-Rite CEO.
"The March date is significant because it will require a shareholder vote on Oracle's slate of directors prior to investors seeing PeopleSoft's first-quarter results," says Ken Carey, enterprise and application software analyst at Susquehanna Financial Group. "We believe the March meeting will be put up or shut up time for Oracle. If an increased bid is coming, we would expect it to be announced prior to the shareholder vote."
Although Conway believes the Justice Department will block Oracle's bid for PeopleSoft, he says it's important to give his company's stockholders an opportunity to bring Oracle's hostile takeover efforts to an end.
Analysts like Carey say Oracle will continue to press the takeover bid, taking it to its logical conclusion, and believe that the ongoing push is beginning to weaken PeopleSoft.
"Oracle's hostile tender offer is having an impact on PeopleSoft's business," Carey says. "It's causing PeopleSoft to offer aggressive pricing and other things they might not have done otherwise. In the fourth quarter, PeopleSoft reported license revenue of about $185 million, compared with street expectations of between $190 million and $195 million."
PeopleSoft's stock has dropped slightly since its fourth-quarter earnings report last week, but at about $21.50 it is still above Oracle's $19.50 bid. If PeopleSoft's stock remains above Oracle's offering price, Oracle will have to raise its bid if it hopes to acquire PeopleSoft.