Oracle Corp. won a victory in federal court that allows it to continue its pursuit of PeopleSoft Inc. for an unfriendly takeover. U.S. authorities in the Department of Justice had sought to block Oracle's acquisition attempt on antitrust grounds. Oracle promptly extended its tender offer of $21 per share, which PeopleSoft rejected as inadequate (PeopleSoft's share price has not been above $20 since March). Oracle's takeover attempt dates back to June 2003.
There are still several major-obstacles Oracle must overcome to acquire PeopleSoft, notes Jim Shepherd, an analyst with AMR Research Inc.. "The European Commission has still not issued its opinion, PeopleSoft's poison pill provision would need to be suspended by the board of directors, and a majority of PeopleSoft shareholders would have to be convinced to tender their shares at some agreeable price."
The big winner, in the near term at least, looks to be rival software vendor SAP, Shepherd notes. "The uncertainty about the fate of PeopleSoft and the distraction of Oracle executives have certainly contributed to SAP's positive results over the last several quarters, and that is unlikely to change." The odds of a well-heeled white knight stepping in to rescue PeopleSoft from Oracle — IBM Corp. and Microsoft Corp. are the most frequently mentioned — are highly unlikely, Shepherd believes.