Oracle: Let's get past this 'impasse'

Oracle's latest message to PeopleSoft boils down to two words: Enough already.

On Sunday, the database software giant and prospective PeopleSoft conqueror issued a letter of complaint to the takeover target's board of directors after that board refused to negotiate a deal between the two companies. That refusal came just hours after a majority of PeopleSoft's shareholders on Friday agreed to tender their shares to Oracle.

"We have received your response to our letter of Nov. 19, 2004, and we see it for what it is, a second rejection of our best and final offer of $24 per share, yet this time with a repudiation of the choice nearly 61 percent of your shareholders have already made," Jeff Henley, Oracle chairman, said in the letter. "We are obviously at an impasse."

The shareholders' action is an important victory for Oracle in a merger bid now valued at $9.2 billion, but hardly the last word in a software industry saga that has been running for more than 17 months.

The two companies are still locked in a courtroom battle over an antitakeover provision, known as a poison pill, set up by PeopleSoft that could make it prohibitively expensive for Oracle to actually acquire the shares tendered to it. A hearing in that case is scheduled for Wednesday in Delaware Chancery Court.

Industry watchers and proxy solicitors see the companies heading toward a proxy fight in the spring, ahead of PeopleSoft's annual meeting, for which a formal date has yet to be set. If Oracle is able to get shareholders to elect a new board that is favorable to its cause, that board could remove the poison pill.

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