November 18, 2004 7:55 AM PST
Duffield: Oracle's skewing facts on stock sales
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PeopleSoft founder and Chief Executive David Duffield on Thursday accused Oracle of issuing misleading information on his stock sales last year. Both companies also filed notices with the U.S. Securities and Exchange Commission on their pleas for investor support from PeopleSoft's shareholders.
The volleys came just a day before a Friday deadline set by Oracle. The database software maker has told PeopleSoft shareholders that they must tender their shares at $24 apiece to allow Oracle's takeover bid for its rival to proceed, or the deal is off. Earlier this week, two prominent institutional investors took opposing sides on whether to accept the offer.
Oracle's quest to acquire began in June 2003 and has survived an antitrust court case launched by the U.S. Department of Justice and an inquiry by European regulators.
In September 2003, Craig Conway, who was PeopleSoft's chief executive at the time, told analysts during a conference that Oracle's hostile bid was not affecting the company's sales. PeopleSoft's board, however, was aware of his misstatements and soon issued a revised filing with the SEC.
Also that month, Duffield sold 400,000 shares. Then, in October, the number of shares he sold jumped to 776,469. His stock sales later fell back to 100,000 in November and rose again to 440,050 in December.
Duffield defended his actions, noting that the sales took place through a scheduled divestiture plan, as well as through a charitable foundation for animals.
"I recently learned that Oracle and its representatives are circulating to the media a chart detailing 'my' sales of PeopleSoft stock in late 2003 and suggesting that there is a great story there," Duffield alleged in his letter. "As your people well know from my reports filed with the SEC, all but two of the sales on your chart were conducted through my 10b5-1 plan, which, as you know, is a prearranged plan over which I have no discretion that is used to gradually diversify my investment portfolio."
He added that the only unplanned sales involved those made by his Maddie's Fund pet rescue foundation. Duffield noted that although he is a board member of the foundation, he does not sit on the investment committee that decides which stocks to sell and when.
Duffield concludes his letter by saying he would consider taking legal action if Oracle continues in the same vein.
A spokesman for Oracle declined to comment on Duffield's letter.
Meanwhile, PeopleSoft on Thursday issued a filing with the SEC of a copy of a letter sent to its employees. The letter asked PeopleSoft employees to disregard phone calls Oracle was making to their homes in an attempt to woo them to tender their shares. But the letter also informs employees to expect a call from PeopleSoft's own proxy solicitor.
Oracle on Thursday issued a letter to PeopleSoft shareholders with a call to action.
"It is now time for you, PeopleSoft stockholders, to decide whether to accept our tender offer," the company stated in its SEC filing. "If a majority of PeopleSoft's outstanding shares--approximately 188 million shares--are not tendered, we will withdraw our offer."
If Oracle succeeds with its tender offer, the company said it would seek to have PeopleSoft's board, or the Delaware Chancery Court, remove the company's anti-takeover measures.