Oracle E-Mail Show Aggressive Nature in PeopleSoft Offer
Thursday September 18, 8:04 pm ET
By Mark Boslet
PALO ALTO, Calif. -- In a series of e-mails released Thursday, Oracle Corp. comes across as an aggressive and intimidating competitor, but one interested in acquiring PeopleSoft Corp. and not solely in disrupting its business.
The e-mails, released by a state court in Alameda County, Calif., help support Oracle's claim that its bid to buy PeopleSoft in June was genuine and not just a tactic to hurt that company's sales efforts, as PeopleSoft then claimed.
But they also show Oracle relished its role as spoiler. The database giant had initially bid $16 a share for its rival, but raised that low-ball bid to $19.50 weeks later, valuing the hostile tender offer at $7.25 billion.
PeopleSoft rejected the buyout and filed suit in Alameda County, complaining the offer was meant to damage its business.
Oracle spokeswoman Deborah Lilienthal defended her company. "We've always remained committed to acquiring PeopleSoft and we are today," she said. "There's nothing new in these e-mails."
PeopleSoft spokesman Steve Swasey in turn called the e-mail proof that "Oracle was on a path to disrupt our business and cast uncertainty on PeopleSoft." He said the tactic didn't work.
In one e-mail, Oracle employee Betty Cho writes to a Meta Group analyst that " if you had said that this was an overly aggressive move on Oracle's part to keep (PeopleSoft) from overtaking Oracle as the number two apps vendor, that observation would be difficult for me to argue."
But the e-mails also show Oracle was serious about the deal. "This makes us an even greater threat to SAP (AP )," says Safra Catz, an executive vice president, in an e-mail to several top Oracle executives sent the day the merger was announced.
"Some employees from PeopleSoft will be invited to join us where it makes sense. We don't expect their senior management team to join us."
The internal Oracle messages do state that Oracle was not interested in continuing PeopleSoft's line of software. "Since we will not be integrating the product lines, we expect there to be minimal business integration risk," Catz says.
They also suggest Oracle executives, including Chief Executive Larry Ellison, glossed over the potential difficulties of moving customers from PeopleSoft to Oracle products.
"I don't mind (analysts) thumping us for being overly simplistic in migrating customers from (PeopleSoft) to (Oracle's) 11i -- I'm sure it's not as easy as LJE was trying to make it sound like," says Peggy O'Neill, a vice president of analysts relations.
However, "we've certainly wounded (PeopleSoft)," she writes. "And, of course, our corporate image of being aggressive, brash and marching to the tune of a different drummer has been reinforced."
In the e-mail, Oracle notes that it was looking at ending support for the 11.0 version of Oracle's applications product. Ms. Lilienthal argues to the contrary. "We have no plans to de-support 11.0," she says.
Oracle also includes a win-loss ratio for deals involving its applications software. From December through February, Oracle won 47% of the deals while losing 45%, according to the e-mail.
-By Mark Boslet, Dow Jones Newswires; 650-496-1366; mark.boslet@dowjones.com |
