Oracle to Pay $10.3 Billion to Acquire PeopleSoft

After an emotional and often bitter 18-month battle, PeopleSoft Inc. agreed to be acquired by Oracle Corp. for about $10.3 billion.

Oracle's Chief Executive Larry Ellison had called the merging of the No. 2 and 3 business management software companies inevitable. Oracle's purchase of PeopleSoft creates a powerful competitor to SAP AG of Germany, the world's leading business management software maker, the Wall Street Journal reported.

The combined company also creates formidable competition for Microsoft Corp., and International Business Machines Corp.

The Pleasanton, CA-based PeopleSoft, with 12,750 customers in 25 industries and 150 countries, fended off the advances of Oracle for months, with its board repeatedly saying no to Oracle offers, claiming the company was worth more than Oracle was willing to pay, the Journal reported.

A sticking point was the per-share price Oracle was willing to pay PeopleSoft shareholders, offering $24 per share in November (an offer accepted by a majority of PeopleSoft shareholders) and this week agreeing to $26.50 per share. This new offer seemed to seal the deal for PeopleSoft, which was locked in a court battle in Delaware with Oracle. That case, and another brought by PeopleSoft, were resolved as part of the purchase agreement.

Yesterday, PeopleSoft released a statement saying that, following discussions throughout the weekend and the recommendation of a transaction committee of independent directors, its board had approved a deal and recommended stockholders tender their shares, the Journal reported.

"After careful consideration, we believe this revised offer provides good value for PeopleSoft stockholders and represents a substantial increase in value from October," said A. George "Skip" Battle, chairman of PeopleSoft's transaction committee. "This has been a long, emotional struggle, and our employees have consistently performed well under the most challenging of circumstances."

In Oracle's statement on the PeopleSoft acquisition, Ellison said the transaction will give Oracle additional scale and momentum. "This merger works because we will have more customers, which increase our ability to invest more," he said.

Oracle said it expects the deal to close in early January, the Journal reported.

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