The European Commission today cleared the way for Oracle Corp.'s hostile takeover of PeopleSoft Inc., removing one of the deal's few remaining hurdles.
Antitrust regulators for the European Union initially opposed the $7.7 billion takeover by Redwood Shores, Calif.-based Oracle, but last month's
"There is an absence of sufficient evidence of competitive harm," the EC said in a statement.
Mario Monti, the outgoing EC competition commissioner, helped move the process along, saying he wanted to have a decision before his term expires Sunday.
Obstacles still remain for Oracle, not the least of which is the share price for Pleasanton, Calif.-based PeopleSoft, which opened at $19.75 Tuesday and reached as high as $20.05.
In a release issued shortly after the EC's decision, PeopleSoft said its board of directors would review the implications of the EC's decision. It reiterated that it feels Oracle's current offer of $21 per share is inadequate. PeopleSoft exceeded earnings expectations in the last quarter with revenue of $699 million, a 12% increase over the previous year. Additionally, a case is pending in Oakland, Calif., in which PeopleSoft alleges unfair business practices by Oracle.
PeopleSoft has hinted it might initiate a "poison pill" that would dilute the company's shares and make a takeover more costly. Oracle has challenged the poison pill in court, along with a Customer Assurance Plan that would refund two to five times a customer's license fees should PeopleSoft be acquired and its product line discontinued. Both companies await a decision from the Delaware Court of Chancery in that case.
PeopleSoft's new CEO Dave Duffield, who replaced the ousted Craig Conway at the beginning of the month and has been chairman of the board since 1987, told employees in an e-mail that he didn't return to the company so it could be sold to Oracle.