Oracle's Phillips Vows Continued Fight For PeopleSoft

Once again, the Oracle executive vice president was at the microphone, maintaining that the company remains deadly serious about its plan to acquire PeopleSoft, even after PeopleSoft's acquisition of J.D. Edwards.

This OracleWorld appearance was Phillips' latest attempt to persuade the press, PeopleSoft shareholders and customers, that a combined company would be a stronger competitor and better technology provider than PeopleSoft alone.

Phillips also said Oracle has reached out separately to partners and integrators. An Oracle/PeopleSoft combo with strong infrastructure and applications businesses would open up new opportunities to partners, Phillips told reporters at the San Francisco event.

"Prior to us announcing our plans, both J.D. Edwards and PeopleSoft were rapidly expanding their custom consulting businesses" which compete with third party partners, he said.

Some observers have said that PeopleSoft's buyout of J.D. Edwards with its aging AS/400 technology base, has diluted Oracle's enthusiasm for its $7.3 billion hostile tender offer. The bid is now tied up in private litigation and U.S. Department of Justice review. Should the deal pass muster on antitrust issues, Oracle will proceed with its offer, and likely face PeopleSoft in a Delaware Court over the latter company's poison pill anti-takeover defense.

Phillips said such defenses usually buy time for the target company to negotiate better terms. Phillips and Oracle chairman Larry Ellison have repeatedly said that PeopleSoft CEO Craig Conway and his board are not acting in the best interests of their shareholders in rejecting the Oracle offer.

Pleasanton, Calif.-based PeopleSoft has offered customers a money-back guarantee on their purchases if there is a change of corporate ownership. Presumably the acquiring company would assume that outlay. "It's interesting that [Conway] said the Oracle deal is dead and then extended the money-back offer. ...that is not consistent," Ellison said Tuesday in response to a question on the deal.

Last week, Oracle extended its tender offer for the third time. The $19.50 per share cash bid now will expire October 17. The initial offer was made in early June and has been extended three times now.

Phillips said it has been difficult to find and talk to PeopleSoft customers about Oracle's intentions. In the announcement of Oracle's original bid, a tersely worded statement seemed to indicate that Oracle would dead-end PeopleSoft applications. That verbiage has haunted the bid ever since.

Since then Oracle has seen lawsuits launched against it by the State of Connecticut and others who suspect Oracle will deep-six PeopleSoft product support. Since then the company has hosted town meetings and conference calls to reassure that customer base

Asked what lessons he'd learned from what has become a long-running saga, Phillips said he wished Oracle had gotten the PeopleSoft customer list faster. It was hard to locate and reach key customers he noted.

For more on the PeopleSoft acquisition battle see CRN's PeopleSoft news center.