Oracle-PeopleSoft Saga

In a flurry of letters between management at both companies, Oracle claimed it had a shareholder mandate to proceed with its $9.2 billion buyout plan, while PeopleSoft said that money doesn't represent the company's real worth.

Last Wednesday, a Delaware Chancery court judge set a Dec. 13 date for a hearing on PeopleSoft's anti-takeover defenses. Oracle wants the judge to invalidate these poison pill provisions. PeopleSoft wants him to wait until after its annual meeting. A specific date for that meeting has not been set.

Two weeks ago, Oracle claimed that 60 percent of PeopleSoft shares outstanding had been tendered in favor of its cash offer. Oracle CEO Larry Ellison and Chairman Jeff Henley sent a letter to PeopleSoft management requesting a meeting and swift resolution.

PeopleSoft's board responded, contending yet again that Oracle's offer is insufficient.

"Our board is convinced that a majority of our stockholders agree that your $24 [per-share] offer is inadequate and does not reflect PeopleSoft's real value," wrote A. George "Skip" Battle, a PeopleSoft director and chairman of the transaction committee.

The only certainty is that solution providers on both sides of the aisle want resolution so they can get back to business.

Customers like clarity, and right now there is a lot of confusion, several partners said.

Ron Zapar, CEO of Re-Quest, an Oracle partner in Chicago, said the vendor has been forthright about its quest. "[Oracle is] to a point and the industry is at a point of maturity, so growth comes with new markets and new products [that come about] both organically and through acquisition," he said.

Still, Oracle's blunt wording when it announced its hostile bid 18 months ago left a bad taste in many mouths. Oracle conveyed the impression that it would move PeopleSoft customers over to its own, far less-mature applications.

Most observers agree that was a poor move. "There is a loyalty among PeopleSoft users that is almost cultlike. Many users became shareholders and are huge supporters because they believe the PeopleSoft message," Zapar said.

Chris Rapp, vice president of business development at Apex IT, a Minneapolis-based PeopleSoft partner, said the bickering has hurt business all around.

If the deal goes through, "we will tell our customers to get up to the latest version of PeopleSoft as soon as possible," Rapp said. "My guess is Oracle won't be able to figure out what to do for at least a year."

The only beneficiaries are SAP, which dominates enterprise applications, and Microsoft, "which is at the doorstep," he said.