Oracle’s Hostile Takeover of PeopleSoft

B. Rajesh Kumar
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B. Rajesh Kumar: Institute of Management Technology

Chapter 29 in Wealth Creation in the World’s Largest Mergers and Acquisitions, 2019, pp 251-258 from Springer

Abstract: Abstract On June 6, 2003, Oracle had announced a hostile takeover of PeopleSoft. Oracle had offered to buy PeopleSoft’s shares at a price of $16 per share which represented a premium of 6% over the company’s price the week before the announcement. The deal was valued at $5.3 billion. It was a major deal announcement after IBM bought Lotus Development in the year 1995. The all-cash deal signified that the shareholders of PeopleSoft would not get a stake in the new company. This strategic move by Oracle came 4 days after PeopleSoft announced that it would buy JD Edwards for $0.17 billion. Oracle’s final offer of $26.5 per share in cash was accepted by PeopleSoft’s board of directors on December 12, 2004. The deal value was finally estimated as $10.3 billion. PeopleSoft the number two supplier of enterprise application software became the wholly owned subsidiary of Oracle Corporation. The merger made Oracle the world’s second largest seller of business application software behind SAP AG. The acquisition of PeopleSoft gave Oracle the size it required to compete effectively in the applications market. The Oracle stock price gained approximately 17.2% during the 410 days (−8 day to +401 day) surrounding the takeover announcement period.

Keywords: PeopleSoft; Enterprise Application Software; Oracle Corporation; Announcement Period; Takeover Announcement (search for similar items in EconPapers)
Date: 2019
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DOI: 10.1007/978-3-030-02363-8_29

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