Oracle Plans Director Slate for PeopleSoft
Software company Oracle Corp. said Wednesday that it planned to nominate four candidates for election in 2005 to the board of its rival and takeover target PeopleSoft Inc.
Oracle, which has been trying to buy PeopleSoft in a drawn-out hostile takeover battle, said it told PeopleSoft of its intentions. It plans to nominate Duke Bristow, Roger Noall, Laurence Paul and Artur Raviv to PeopleSoft’s board.
“We believe that the current board of PeopleSoft is not acting in the best interests of stockholders and that a large majority of those stockholders are in favor of a change,” Oracle Chairman Jeff Henley said in a statement.
The board of Pleasanton, Calif.-based PeopleSoft recently rejected Oracle’s latest bid of $9 billion, or $24 a share, for the company.
Oracle said it would be soliciting proxies for use at PeopleSoft’s 2005 annual meeting.
Bristow runs a director training program at UCLA Anderson School of Management and holds directorships at two companies. Noall is a director of Alleghany Corp.
Paul is the managing principal at private equity firm Laurel Crown Capital, and Raviv is a professor of finance at Kellogg School of Management at Northwestern University.
PeopleSoft shares rose 18 cents to $23.52. Redwood City, Calif.-based Oracle rose 9 cents to $12.79. Both trade on Nasdaq.
Also Wednesday, a proposal to settle a lawsuit brought last year by PeopleSoft shareholders failed to clear court after a judge found it unfairly cut off their right to sue over the company’s resistance to Oracle’s takeover.
“It’s just not enough,” Delaware Chancery Court Judge Leo Strine said of the proposed settlement filed just days after Oracle began its long attempt to acquire PeopleSoft.
The lawsuit contained allegations of wrongdoing similar to those raised by Oracle in its own case against PeopleSoft and its anti-takeover measures.
One term of the settlement would have required PeopleSoft’s board to vote on whether to keep in place the so-called poison pill anti-takeover measure that stands as a potential obstacle to Oracle’s purchase of PeopleSoft.
The poison pill, a shareholder rights measure that will trigger a ballooning of the takeover price if Oracle acquires a significant number of shares of PeopleSoft, will be the chief focus of the hearings in December.
Another settlement provision was an agreement by PeopleSoft to limit a special customer protection contract clause only to Oracle.
Had the settlement been approved, PeopleSoft would have had at least partial endorsement from shareholders’ attorneys as it continues to defend its corporate anti-takeover devices.
The same attorneys who were pushing for court approval of the settlement, however, were also seeking permission to file a supplemental complaint to challenge the propriety of the most recent decision from PeopleSoft’s board.
Strine called the offer of $21 a share that was in place at the time of the trial “a responsible level,” adding it was “certainly not ludicrous.”
At $24 a share, Strine said the offer was an “all-shares, premium offer that’s unconditional.”
Strine noted that he had long been reluctant to approve the shareholder settlement before seeing the evidence that Oracle planned to put on in the trial of its very similar lawsuit against PeopleSoft.
The fundamental flaw in the proposal, Strine said, was its failure to take into account developments of recent months.
Given the new offer and the prospect of getting new evidence on how PeopleSoft’s board analyzed it, the judge said, the proposed settlement gave away too much.
