PeopleSoft Ups The Ante For J.D. Edwards

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Do you have a scorecard? Good . . . Here goes:

Software maker PeopleSoft wants to acquire software maker J.D. Edwards. Rival software maker Oracle doesn't want to see that happen because it would knock them off their dominant market position, so Oracle made a hostile $5.1 billion cash takeover bid for PeopleSoft. The PeopleSoft Board didn't like the Oracle offer so they rejected the bid and filed a lawsuit against Oracle claiming unfair business practices. J.D. Edwards sides with PeopleSoft and wants the original merger to go through.

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The fight has now moved from the Board room to the court room to the living room. Oracle has taken out ads in major newspapers showing a declining PeopleSoft share price with a statement, "Look what PeopleSoft management's done for you lately."

PeopleSoft countered with its own ads. "PeopleSoft was the target of a hostile bid precisely because we have stronger products and precisely because we are so well-positioned," PeopleSoft CEO Craig Conway wrote. "Don't let it happen. Show your support for PeopleSoft by moving ahead with your planned purchases of PeopleSoft products this month."

And this week, PeopleSoft amended its merger agreement with J.D. Edwards by sweetening the deal with an additional $50 million and offering the option for stock or cash to J.D. Edwards shareholders.

To move a merger ahead quickly, PeopleSoft and J.D. Edwards have amended their agreement to eliminate the need for a shareholder vote. Oracle has jumped on that change, and questioned PeopleSoft's practices. "PeopleSoft is doing everything it can to prevent its shareholders from voting," Oracle CEO Larry Ellison said in a statement late Monday. "If PeopleSoft's Board is so convinced that the J.D. Edwards acquisition is a great deal, why won't it let their shareholders vote on it?"

This battle is far from over.

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