PeopleSoft Inc. is sending a letter to shareholders asking them to approve its candidates for the board of directors and turn back Oracle Corp.'s $9.4 billion hostile takeover bid.
"This board has clearly demonstrated their commitment to you by rejecting Oracle's offers, which undervalue PeopleSoft and are likely to be prohibited under antitrust law," reads the letter. It's signed by PeopleSoft president and CEO Craig Conway.
The mailing follows Oracle's letter to investors last week that laid out its case for merging the two business software firms. Oracle has proposed paying PeopleSoft stockholders $26 in cash per share, which it has called its "final offer."
PeopleSoft's letter touts the company's "outstanding financial results," citing a 44% increase in share price from the time it announced it was acquiring rival J.D. Edwards & Co. until the end of 2003. The letter also defends PeopleSoft's controversial customer assurance program, which would refund two to five times licensing fees if Oracle acquires PeopleSoft and discontinues product support.
"This program was developed to help protect and create shareholder value by giving customers signing new contracts confidence that their investments in PeopleSoft products will be protected," the letter says.
Antitrust authorities may have the final say on the takeover. Staffers at the U.S. Department of Justice are recommending that the deal be blocked, though a final ruling isn't expected until March 2. Regulators in Europe are due to weigh in by May.
PeopleSoft shareholders are scheduled to elect a board of directors on March 25. PeopleSoft is nominating four directors for reelection; Oracle is proposing a separate slate and wants investors to increase the size of the board from eight members to nine.