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Mergers & Acquisitions: Article

Oracle Persists

Oracle Persists

Oracle, which is waiting to make its closing argument on July 20 in the Justice Department's suit to derail its controversial, yearlong attempt to acquire PeopleSoft, has extended its tender offer for the company yet again - this time till August 27. As of Monday, some 4.7 million shares, a pittance, had been tendered. It's currently offering $21 a share and, given its strong performance at the trial, conventional wisdom is giving it a shot at bringing home the prize provided it can overcome PeopleSoft's poison pill defenses.

PeopleSoft last week, lamely blaming Oracle and the publicity surrounding antitrust trial, warned that its second-quarter numbers wouldn't meet expectations. It figures it'll clear between $655 million and $665 million in revenues for the June quarter rather than the $675 million-$697 million it promised and earnings of 13 cents-15 cents rather than 20 cents-22 cents. Fending off Oracle cost PeopleSoft two cents a share in the quarter, it said.

Observers think PeopleSoft hasn't gotten the boost from its $1.8 billion acquisition of JD Edwards last summer that it claimed. Merrill Lynch, which has been skeptical about the alleged PeopleSoft-JDE synergies, thinks the "core PeopleSoft product cycle has been played out," apparently aggravated by PeopleSoft's controversial Oracle-deflecting rebate program.

Meanwhile, people are beginning to think the business software market is also weaker than they figured.

A ruling in the DOJ case - the government claims competition would shrink - is expected this summer. PeopleSoft's own case against Oracle is slated to start November 1.

More Stories By Maureen O'Gara

Maureen O'Gara the most read technology reporter for the past 20 years, is the Cloud Computing and Virtualization News Desk editor of SYS-CON Media. She is the publisher of famous "Billygrams" and the editor-in-chief of "Client/Server News" for more than a decade. One of the most respected technology reporters in the business, Maureen can be reached by email at maureen(at)sys-con.com or paperboy(at)g2news.com, and by phone at 516 759-7025. Twitter: @MaureenOGara

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