New York, Feb 05: Software provider Oracle Corp. raised its unsolicited takeover offer for PeopleSoft Inc. on Wednesday by a third to $9.4 billion, signaling its determination to win over PeopleSoft shareholders ahead of a key March vote.
Analysts said the new bid was compelling, and saw Oracle's bravado as a sign of confidence ahead of a crucial ruling from the US Department of Justice on whether the deal would be anti-competitive.
"Oracle wouldn't have gone forward if it didn't believe it would get DOJ approval for the bid," said Summit Technology Partners analyst Richard Williams, a sentiment echoed by one source close to the deal.
"I think it's a testament about how good Oracle feels about where it is in the process," the source said. Oracle is "cautiously optimistic that it will come to a favorable resolution with the DOJ."
The market took a wait-and-see approach, however. Oracle, the world's No. 2 software maker, raised its offer for PeopleSoft to $26 per share from $19.50, as it seeks to create a business software maker to better compete with Germany's SAP and larger rival Microsoft Corp..
Yet PeopleSoft shares closed more than $3 below that level at $22.70, as investors stayed skeptical ahead of the regulatory ruling. Redwood Shores, California-based Oracle, which said this was its final offer, expects a decision before March 12. Oracle shares closed down 64 cents, or 4.6 percent, at $13.27.
PeopleSoft, which has characterized Oracle's bid as a plot to eliminate a rival, on Wednesday said its board would meet to review the new offer, and asked its shareholders not to act on the latest bid.
Bureau Report