EC Halts Oracle/PeopleSoft Inquiry
Updated · Jan 13, 2004
will wait longer than expected to hear whether its bid for PeopleSoft
The European Commission has put its in-depth investigation into the hostile takeover attempt on hold to request additional information from the database and applications vendor, according to published reports.
EC spokeswoman Amelia Torres told internetnews.com “we suspended the clock because we asked the companies to supply some information for our review and of course because we have legally binding deadlines we cannot allow the clock to keep ticking.”
The deadline Torres is referring to is the March 30 deadline by which the EC has slated to conclude its investigation into the Oracle/PeopleSoft merger.
Oracle faces no deadline for a reply to the Commission’s request but for each day that goes by that the company waits to fill the formal information request, the EC will tack on an extra day to its own March 30 deadline.
Oracle spokeswoman Jennifer Glass refused to comment on the issue.
Oracle had supplied the EC with additional information in October. But neither the EC nor fellow investigating body U.S. Department of Justice are rushing to come to a decision with so much at stake.
Redwood Shores, Calif.’s Oracle is attempting to buy enterprise applications vendor PeopleSoft for what is a current price tag of $7.5 billion, which would make it the second largest applications vendor in the world, next to Germany’s SAP
But New York-based Marlin & Associates analyst and founder Ken Marlin says it’s not the EC that is putting the merger on ice, it’s PeopleSoft.
“PeopleSoft has succeeded in making itself too expensive for Oracle to acquire it for the moment,” Marlin told internetnews.com. “Certainly the poison pill and rebates have really made it very expensive. The thinking at this point is that Oracle has backed off because of it. That doesn’t mean that they have dropped off forever. It will happen but will take a little while. They will probably wait until PeopleSoft’s stock price drops.”
PeopleSoft, which successfully acquired J.D Edwards for $1.75 billion in 2003 to become the No. 2 applications vendor, is fighting for its life. Just Monday, the Pleasanton, Calif.-based firm announced a $200 million share buyback plan to bring more shares under its aegis, making it a more challenging acquisition target. That backs up the $350 million share buyback the concern closed December 2.
Both the EC and DOJ are expected to come to a conclusion early this year that either Oracle was exhibiting monopolistic tendencies that could hurt customers or that PeopleSoft is hurting the market with its refusal to merge. The EC is concerned about the potential effect the transaction would have on large multinational companies that use customer relationship management (CRM)
A recent court filing indicated the DOJ would reach a decision on whether or not it would challenge the Oracle bid in early March.
Clint Boulton, a senior writer at CIO, covers IT leadership, digital transformation, and the CIO role. He was a content marketer for Dell APEX. Inspire IT leaders with tales about the advantages of multi-cloud infrastructures. Dunning-Kruger bias is something that keeps IT leaders sceptical, but curious nonetheless.