Oracle Claims PeopleSoft Prize, Deal To Close Friday

PeopleSoft shareholders have tendered more than 97 percent of outstanding shares in favor of Oracle's $10.3 billion cash bid, according to Oracle. Oracle plans to close the acquisition Friday, according to a statement issued Thursday night.

The combined company would be the world's second-largest enterprise software provider after German juggernaut SAP. But it faces additional competition from Microsoft's Business Solutions group in applications as well as from IBM in infrastructure software and middleware.

Since Oracle launched its surprise, hostile bid for PeopleSoft in June 2003 at $16 per share, or about $5.1 billion, the tender offer has been extended 16 times. The price was raised four times and lowered once. Oracle's latest tender offer to buy all outstanding PeopleSoft shares expired at 8 p.m. EST on Thursday, but PeopleSoft gave up its fight a few weeks ago. PeopleSoft Chairman and CEO Dave Duffield resigned just before the new year.

Industry watchers expect significant layoffs in the San Francisco Bay area where both companies are based, as well as more executive changes as Oracle absorbs its prize. Oracle CEO Larry Ellison, working to allay concerns that Oracle would dismantle PeopleSoft's applications, last month promised to "over support" PeopleSoft's current and next-generation products.

Oracle Co-President Charles Phillips already has sent letters to PeopleSoft partners to reassure them that Oracle will continue to value PeopleSoft applications and expertise.