PeopleSoft agrees to Oracle merger

PeopleSoft gave in to the relentless pursuit of Oracle Corporation today and agreed to a definitive merger agreement valued at approximately $10.3 billion.

Based upon the recommendation of the Transaction Committee of independent directors, PeopleSoft’s Board of Directors approved an agreement by which a subsidiary of Oracle will acquire all PeopleSoft shares for $26.50 per share in cash.

Under terms of the agreement, Oracle will revise its tender offer by this Wednesday, Dec. 15, and it will remain open through Dec. 28, unless extended in accordance with the merger agreement. The board recommends that PeopleSoft stockholders tender their shares into Oracle's offer.

Oracle and PeopleSoft will each stay all pending litigation and will dismiss such litigation permanently following the consummation of the offer. The offer is subject to at least a majority of the fully diluted outstanding shares being validly tendered into the offer and to a limited number of other customary conditions.

Citigroup Global Markets and Goldman, Sachs & Co. are financial advisors to PeopleSoft. Cleary, Gottlieb, Steen & Hamilton and Gibson, Dunn & Crutcher LLP are legal advisors to PeopleSoft.

Oracle first offered to acquire PeopleSoft in June of 2003 for $5.1 billion in what was a hostile takeover bid. PeopleSoft had just announced its intention four days earlier to acquire J.D.Edwards for $1.7 billion.

People rejected Oracle’s bid and a subsequent bid on June 18th for $6.3 billion. PeopleSoft and J.D. Edwards both sued Oracle, claiming the company was interfering with their merger, which they accelerated and consummated in mid July.

Oracle raised the bid again in February of this year to $26 per share, just a half-dollar per share less than the final price agreed to today. PeopleSoft rejected this offer as well as one in June where it lowered the bid to $21 per share.

In July, PeopleSoft said it would not meet second quarter earnings and blamed Oracle. By October 2, the board at PeopleSoft had lost confidence in CEO Craig Conway and fired him.