Oracle Persisting With Its Bid to Acquire PeopleSoft

Despite continued skepticism from Wall Street and Silicon Valley, Oracle Corp. intends to plow ahead with its attempt to buy business software maker PeopleSoft Inc., regardless of any obstacles, according to people familiar with the plans.

The world’s second-largest software company is drawing up plans to nominate a slate of PeopleSoft directors, should the fight get that far. Oracle’s lawyers also are readying a defense for any possible regulatory opposition to the $7.3-billion proposal, these people said.

Analysts and investors said they thought Oracle would have to pony up more than the $19.50 a share it had offered to spur shareholders to rid the company of its poison-pill takeover defenses -- if and when U.S. and Europe antitrust regulators approved the acquisition.

Oracle has said it saw no reason to discuss any change in price now, but the company signaled some flexibility over the summer on the condition that PeopleSoft negotiate a friendly deal, people familiar with the talks said.

Redwood Shores, Calif.-based Oracle offered more than $100 million in the form of a break-up fee to help underwrite any risk of regulatory opposition, and also invited PeopleSoft to name its own break-up fee figure, these people said.

Oracle “made multiple entreaties to PeopleSoft that there was flexibility in a number of areas, which were rebuffed,” one person said.

PeopleSoft officials denied that Oracle ever offered any such flexibility. The board reviewed and rejected the initial $16-a-share offer and the sweetened $19.50-a-share bid.

“Beyond that, there has been no phone conversation, meeting or exchange whatsoever between PeopleSoft and Oracle,” a PeopleSoft spokesman said.

Oracle’s chief executive, Larry Ellison, professed his determination to complete the takeover in an interview last week.

“However long it takes, we’re going to hang in there,” Ellison said. “I don’t think there is any doubt that we will get the company. We will get PeopleSoft.”

But PeopleSoft CEO Craig Conway pronounced the deal “dead” in an interview last month.

Meanwhile, U.S. officials have begun questioning Oracle’s customers, a move that attorneys say may signal that regulators are preparing to block the deal.

Also, PeopleSoft on Monday said its third-quarter profit would be higher than originally anticipated, lifting its stock price and possibly adding another complication to Oracle’s bid.