Oracle Says It Can Fund PeopleSoft Takeover

Oracle Corp. said Tuesday that it had enough cash to fund its $7.5-billion takeover bid for rival software maker PeopleSoft Inc. even after disclosing that it had lowered its credit line with banks to $1.5 billion from $5 billion.

“The tender offer remains fully funded and is still not subject to any financing conditions,” said Deborah Lilienthal, a spokeswoman for Oracle, the world’s second-biggest software maker.

“We lowered the [credit line] amount with investment bankers because we simply have enough cash on hand on our balance sheet,” she said.

According to a Securities and Exchange Commission filing Monday, Oracle secured a $1.5-billion credit line from Credit Suisse First Boston, ABN Amro Bank and other banks last week, replacing a previously arranged $5-billion credit line.

Oracle, based in Redwood City, Calif., had $8.1 billion in cash as of Nov. 30, according to the filing.

Oracle this month extended its tender offer for Pleasanton, Calif.-based PeopleSoft to Feb. 13, saying that 12.4 million shares -- about 3% of total PeopleSoft shares outstanding -- had been tendered and not withdrawn by the December deadline.

Antitrust regulators in the United States and Europe are reviewing Oracle’s bid and are not expected to issue a decision until early in 2004. The deal is essentially on hold until regulators issue that decision.

PeopleSoft’s board, which has unanimously rejected Oracle’s advance, has said that the deal is likely to be blocked on antitrust grounds and that the offer undervalues the company.

On Tuesday, shares of Oracle rose 1 cent to $13.19, and PeopleSoft shares rose 34 cents to $22.81. Both trade on Nasdaq.