Oracle Makes Offer for PeopleSoft

$5.1 billion bid to buy rival puts J.D. Edwards deal in doubt

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Redwood Shores, CA — June 6, 2003 — e-Business solutions company Oracle today gave the enterprise software a final jolt for the week by offering to buy rival PeopleSoft, which only a few days ago itself offered to buy competitor J.D. Edwards.

Oracle said it would commence a cash tender offer to purchase all outstanding shares of PeopleSoft for $16 per share, or approximately $5.1 billion.

On Tuesday, PeopleSoft said it would buy rival J.D. Edwards & Co. in a $1.7 billion stock swap that would create one of the world's largest enterprise applications software companies. That deal, which would have vaulted PeopleSoft into the No. 2 slot among enterprise applications vendors, behind SAP, was to be completed in the autumn but was put in question by Oracle's offer.

In its statement announcing the offer, Oracle said that once its acquisition is complete, it would review whether, and on what terms, Oracle would support the J.D. Edwards acquisition.

"The acquisition of PeopleSoft will immediately make Oracle an even more profitable and competitive company," said Oracle's chairman and CEO, Larry Ellison, in a statement.

Ellison added that while Oracle would not actively sell PeopleSoft products to new customers, it would provide "enhanced support" for PeopleSoft products and would incorporate some features from PeopleSoft's products into future versions of Oracle's own eBusiness Suite.

Oracle said that Ellison has submitted a letter to PeopleSoft's board of directors proposing to discuss the offer.

PeopleSoft had no immediate official response to Oracle's acquisition offer.

Oracle said the tender offer, which would be subject to customary conditions and the availability of a majority of PeopleSoft's shares, would commence on Monday.

According to Oracle, Credit Suisse First Boston has provided a bridge financing facility and is advising Oracle on the transaction. In its report on its fiscal third quarter, ended February 28, Oracle reported having about $4.0 billion in cash and cash equivalents, as well as nearly $2 billion in short term investments.

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