New York, July 20: PeopleSoft said on Friday it had taken control of J D Edwards & Co, creating the world's second-biggest applications software company and making a hostile acquisition of PeopleSoft by Oracle more difficult.
PeopleSoft said it had purchased about 88 per cent of J D Edwards' outstanding shares and expected to buy the rest of the company by the end of August.

The company also said J D Edwards Director Michael Maples, a former executive at both IBM and Microsoft, was elected to PeopleSoft's board -- bringing its total membership to eight.

COMMERCIAL BREAK
SCROLL TO CONTINUE READING

PeopleSoft's purchase of J D Edwards bolsters two of its defenses against the unwanted Oracle overture. First, the acquisition will make a takeover by Oracle more expensive and, second, an additional board seat will make it harder for Oracle to take control of PeopleSoft's board.

Both PeopleSoft and J D Edwards specialize in selling applications, software that manage tasks such as accounting, inventory and human resources.

PeopleSoft Chief Executive Craig Conway said the merger creates the second-largest enterprise applications software company in the world after Germany's SAP AG.

Oracle announced its hostile bid just days after PeopleSoft said it planned to acquire J D Edwards and create a company that would, by a thin margin, unseat Oracle as the world's second-biggest applications vendor.

PeopleSoft plans to issue around 52 million new shares, adding about $1 billion to Oracle's $19.50 per share offer and bringing the total cost to $7.3 billion, said analysts.

CEO Larry Ellison has repeatedly attempted to scuttle the J D Edwards deal, even vowing to seek seats on the board at PeopleSoft's 2004 annual meeting, when four directors will be up for election.

Despite the setback, an Oracle spokesman on Friday said his company would not back down, even with the addition of J D Edwards.

Analysts do not expect Oracle to change its bid until antitrust regulators are done reviewing its proposals.

"We believe Oracle will continue to pursue the acquisition pending anti-trust approval," said Tad Piper, senior analyst at US Bancorp Piper Jaffray. "(Oracle is) unlikely to change its stance on either structure or price until there is clarity on the antitrust front, which could take several months."
Bureau Report