PeopleSoft Moves to Buy J.D. Edwards, Oracle Moves to Buy PeopleSoft

PeopleSoft is a provider of application software for the real-time enterprise. J.D. Edwards offers collaborative enterprise software in addition to consulting, education and support services.

Following hard on the heels of the announcement came news of a hostile takeover bid for PeopleSoft for $5.1 billion by Oracle, number two in the market. According AMR Research, in a conference call Oracle CEO and chairman, Larry Ellison said his company would support PeopleSoft customers, but kill the product when Oracle’s newest version appeared.

With no mention of money changing hands, the original deal calls for J.D. Edwards stockholders will receive 0.860 shares of PeopleSoft common shares for each of their shares. As a wholly owned subsidiary of PeopleSoft, J.D. Edwards stockholders will end up owning about 25% of the combined company.

Despite the uncertainty created in the market by the Oracle bid, PeopleSoft continued on its original course of purchasing J.D. Edwards as it filed necessary federal papers about the merger on June 11.

“The combination of J.D. Edwards and PeopleSoft is a winning one for customers,” says Craig Conway, PeopleSoft President and CEO. “Both mid-sized and large enterprise customers will have access to the broadest suite of integrated enterprise software applications in the world.”

Bob Dutkowsky, J.D. Edwards Chairman, President and CEO concurs. “PeopleSoft’s strength in the large enterprise space and services industries, combined with J.D. Edwards’ position as an acknowledged leader in the mid-market and manufacturing, means we will be able to serve the entire enterprise software market in a way no other vendor can.”

The Oracle offer is $16 a share for PeopleSoft stock, which has been characterized as being too low. That the bid is hostile was reflected in Conway’s commenting that Ellison’s takeover bid was evidence of atrociously bad behavior.

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