December 10, 2004 12:54 PM PST

PeopleSoft picks date for Oracle showdown

PeopleSoft set the clock on Friday on what may be the final battle in a prolonged war with Oracle.

The software firm plans to hold its annual shareholder meeting on March 25, when the firm's shareholders may be asked to make a final call on whether PeopleSoft remains independent or merges with rival Oracle.

Oracle is offering $9.2 billion for its software rival. A majority of PeopleSoft's shareholders have tentatively accepted the bid, but the board of directors has rejected it and is using a "poison pill" antitakeover measure to keep Oracle at bay.

The unwelcome suitor is trying to convince a Delaware judge to invalidate the poison pill, which makes an uninvited transaction prohibitively expensive by diluting the holdings of any hostile buyer. If that fails, Oracle has signaled it will launch a proxy fight for control of PeopleSoft's board via a director election at the March meeting.

Oracle has already nominated its own set of candidates to fill the four seats that are up for grabs on the seven-seat PeopleSoft board. One of the four directors up for re-election is PeopleSoft Founder and CEO Dave Duffield. If Oracle's nominees win, it will be able to toss the poison pill out and proceed with the deal.

However, a proxy fight is not inevitable, according to market analyst firm AMR Research. The firm's analysts believe a variety of other scenarios are more likely.

"PeopleSoft and Oracle will either finally announce that they've reached an agreement, or PeopleSoft will preempt the proxy vote by putting forth either a 'white knight' acquirer or a viable recapitalization plan," the research firm said on Thursday in a report.

In any case, the next skirmish in the battle is set for Monday, when both companies are scheduled to reconvene in Delaware Chancery Court to submit new evidence in the poison pill trial.

 

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