Oracle keeps PeopleSoft in its scope

Oracle executive vice president, Charles Phillips said PeopleSoft will struggle to meet the financial goals it laid out for itself.
 
In a post session at OracleWorld 2003, Phillips told the assembled media the biggest hurdle has been getting its message across to PeopleSoft customers. PeopleSoft management and the media has been 'bombarding' its customers with negative messages about the bid and 'frightening' them, Phillips claimed.
 
Phillips expressed a wish to 'get in front of PeopleSoft customers' and give them the message that Oracle will continue to support and enhance its products. On the question of Oracle's intention to stop marketing PeopleSoft products, he said Oracle does intend to 'not wrap a separate sales and marketing expense around the product' to cut expenses.
 
'That is what loses money for Oracle today,' he said. 'Marketing and sales activity costs a lot of money.'
 
'Over the last year, PeopleSoft has been struggling for a while. That is one of the reasons we believe they went to acquire JD Edwards -- because they've been declining for a while,' Phillips said. 'The second reason is that customers have been running either to us or to SAP.'
 
'It was likely PeopleSoft had to either be bought or buy something else,' he added.
 
Phillips is unfazed about PeopleSoft employing a poison pill tactic to block the bid. Such defences, he said, usually buy time for the target company to negotiate better terms. 'It is very rare a poison pill stops a deal,' Phillips said, in response to PeopleSoft's recent announcement that it plans to earn 90 to 95 cents a share in 2004 after integrating JD Edwards. Oracle CEO Larry Ellison and Phillips have remained gung ho about Oracle's US$7.3 billion quest to buy PeopleSoft, despite the many hurdles.
 
Oracle is currently providing extensive information requested by the US Department of Justice and the European Commission by the end of October. Oracle expects the regulatory reviews to be completed by 'late Fall', October or November, Phillips said.
 
Aside from regulatory approval, Oracle must overcome a lawsuit PeopleSoft filed to block its bid, as well as resistance from PeopleSoft management. Once again, Phillips said PeopleSoft CEO Craig Conway and his board are not acting in the best interests of their shareholders in rejecting the Oracle offer. Phillips claimed Oracle investors and PeopleSoft customers support the bid.
 
'In our conversation with investor - they aren't against it, they are for it. And they are all saying the same thing, that this makes sense because the industry ready to consolidate,' Phillips said.
 
Oracle has not ruled out other acquisition targets and the PeopleSoft bid 'doesn't constrain' Oracle from snapping up other companies. But Philips would not disclose whether these targets are in the application or infrastructure space.
 
'We certainly have an active groups of people putting things together.
PeopleSoft is not the only thing that is possible. It's not the only thing on the list,' he said, adding that it could happen 'before, after or simultaneously' to the PeopleSoft acquisition.
 
Ellison also touched on the subject during his keynote, but remained elusive on the details. When asked by a conference attendee what other acquisition targets are in Oracle's scope, Ellison said: 'If you're an investor I'll email you'.
 
Siobhan Chapman travelled to OracleWorld 2003 in San Francisco as a guest of Oracle.

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