PeopleSoft: ‘We’re Not For Sale’

Michael Singer

Updated · Oct 21, 2004

If Oracle is buying, PeopleSoft’s Dave Duffield isn’t selling — at least not at these prices.

The founder and new CEO of the Pleasanton, Calif.-based software
maker issued a memo to employees this week dispelling any rumors that he
returned to broker a deal with Oracle CEO Larry Ellison in one of the
more memorable hostile takeover bids
in recent history.

“I didn’t come back here to sell to Oracle,” Duffield said in a
memo obtained. “Rather, I’m here to beat
Oracle in the marketplace, increase our revenues, re-energize our
employees, and deliver greater long-term value to our shareholders.”

Duffield continued that the key to preventing a sale to Oracle from
happening is to show some good sales numbers of its own as the company
ramps up its year-end accounts. The task, Duffield said, can be done
with improved products, new offerings, and “outrageous” customer
service. Duffield also pointed to a soon-to-be announced, five-year vision
he believes will keep the company separate from Oracle.

“I want you to know that I myself have been energized through meeting
thousands of our employees in Pleasanton and Denver. You’ve told me
you’re also ready for the challenge,” Duffield said.

The memo seems to be having the desired effect. Sources knowledgeable
about the company said the letter, “has been good for morale,
particularly at headquarters and with those people who aren’t too far
around the bend.”

“Duffield is a straight shooter, and he is not going to try to dupe
his employees,” Paul Hamerman, analyst and vice president of enterprise
applications with Forrester Research, told “He
wants to retain employees as the company goes through a tough time, and
he will do this by being open and honest, rather than trying to give them
a marketing pitch.”

However, Hamerman also points out that the board of directors will
consider a “reasonable and good faith tender offer,” and will be under
pressure from the shareholders to do so.

“Especially if the stock price falls well below $20. This could take
several more months to play out,” Hamerman said.

PeopleSoft’s stock price hovered just above $20 in mid-day trading
and prior to its third-quarter earnings report Thursday.

Rhetoric aside, some analysts suggest that PeopleSoft has already
signaled a willingness to revisit the entire question of acquisition,
which Oracle perceives, rightly or wrongly, as an opportunity to play
hardball on price.

Earlier this month, PeopleSoft Board member Steven Goldby told a
Delaware Chancery Court that the board was always open to discussing a
deal with Oracle at the “right price,” but it would have to be for more
than the offer of $21 per share ($7.7 billion) that Oracle stood on for
several weeks. Oracle’s current tender offer expires this Friday at

“Interestingly, Oracle has its own dilemma here,” suggested Coudert
Brothers attorney Robert Christopher. “The longer this drags out now,
the less valuable to Oracle PeopleSoft’s customer base and other assets
become. While Oracle may delight in either undermining or eliminating
PeopleSoft as a competitor, it would be better to acquire that business
intact than to see it scattered to the winds. SAP becomes the only
winner in that scenario.”

Duffield’s comments come just two weeks after he and the board fired
Craig Conway. The 48-year-old executive had been an outspoken critic
of the hostile takeover and his former boss, Ellison. In a recent
deposition, Conway even admitted
to being publicly combative as a front to protect employees and

The gamble may have been his undoing, according to analysts like
Melanie Hollands, president of Koala Capital, a hedge fund that focuses
on technology stocks.

“Some believe Conway should not have rejected the offer on the day it
was launched and before the PeopleSoft board of directors had time
to consider it,” Hollands told “It’s
interesting, as the company also indicated what the revenues would be;
it had to because otherwise everyone would have assumed Craig was
getting the axe because of a revenue shortfall.”

PeopleSoft was dealt another blow this month as Ram Gupta, head of
software development, left the company. A company spokesperson did not
comment on the departure and declined to say whether the man who helped
PeopleSoft broker the IBM licensing deal had resigned or was fired.

Michael Singer
Michael Singer

Michael Singer is a career coach, podcast host, and author to help you step into a career you're excited about. Currently, He is a coach and trainer helping entrepreneurs and executives achieve business and leadership success. He is also an award-winning business journalist focused on the intersection of technology, Big Data, Cloud, SaaS, SAP, and other trending technology.

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