PeopleSoft Battle Moves To Next Phase - InformationWeek

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PeopleSoft Battle Moves To Next Phase

Oracle needs to control PeopleSoft's board to remove poison pill and approve takeover

Although nearly 61% of PeopleSoft Inc. shareholders recently voted to back Oracle's takeover bid, the two software companies could continue their battle for several more months.

Delaware court deliberations will stretch into December over whether to leave intact a poison pill that PeopleSoft could trigger to block the takeover. Still, the acquisition attempt seems most likely heading for a proxy battle.

Oracle will have to fill seats on PeopleSoft's board with people who favor its position. Four seats are up for re-election at the next shareholders' meeting, which hasn't been scheduled. Control of the board would let Oracle dissolve the poison pill and approve the acquisition. (Oracle had until Nov. 25 to propose its nominees, according to PeopleSoft.)

If Oracle wins, F.W. Murphy will have to evaluate choices, VP Myers says.

If Oracle wins, F.W. Murphy will have to evaluate choices, VP Myers says.
It all adds up to more maneuvering with unclear consequences. "In the short term, I see pain for F.W. Murphy because there's no foreseeable benefit if Oracle acquires PeopleSoft," says Mitch Myers, VP of operations at F.W. Murphy Manufacturing Co., which uses PeopleSoft manufacturing apps. "If Oracle wins this deal, we'll have to evaluate the choices at that time."

What Oracle really wants is to beat IBM and Microsoft in the infrastructure game, and if it can move PeopleSoft's customers onto its database architecture, it will gain ground, according to Meta Group chairman and research director Dale Kutnick.

Next month at OracleWorld in San Francisco, the company is expected to expand its middleware line to support its business applications. The line of infrastructure software would compete with Microsoft's .Net and IBM's WebSphere products.

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