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Oracle Corp. did something extraordinary Wednesday while most of Wall Street was still sleeping. Shortly after 1 a.m. in New York, the Redwood Shores, Calif.-based company announced that it now had control of PeopleSoft Inc., the business enterprise software rival that it has pursued for 18 months. “The combination of these two companies brings together some of the best products and people in the enterprise applications market, all for the benefit of the customer,” Oracle Chief Executive Officer Larry Ellison said. “We are moving forward quickly with the integration planning process and have been pleased by the level of coordination as we combine the two organizations.” Such an outcome was considered improbable a year ago. The Department of Justice on Feb. 26 sued to block the deal, which it had been investigating since Oracle announced the hostile tender in June 2003. The initial offer was for $16 per share. Oracle raised that several times, topping out at $26 per share. It then cut the offer price to $21 per share, citing a refund program PeopleSoft instituted as part of its takeover defenses. Sources have said Oracle spent more than $100 million in legal fees to pursue PeopleSoft. This included hiring Howrey Simon Arnold White to argue on its behalf before the antitrust division. When the Justice Department sued to stop the deal, Oracle retained Latham Watkins to defend it. The month-long trial last summer included testimony from PeopleSoft customers saying they would pay up to 10 percent more for business enterprise software before switching to SAP AG or other rival enterprise software. But Judge Vaughn Walker rejected the government’s case, concluding in September that this testimony was not credible. Despite the court victory, Oracle acquisition of PeopleSoft remained uncertain. PeopleSoft’s board continued to reject the offer and it appeared the matter would be decided by Delaware Vice Chancellor Leo Strine Jr., who was presiding over a challenge to the company’s takeover defenses. At one point, Oracle even warned in a press release that it was prepared to abandon the transaction if shareholders failed to tender. The uncertainty provided investors who bet on a deal closing at a higher price the opportunity to make a bundle. PeopleSoft’s stock dipped below $16 per share in August. Shares bought then and held until tendered resulted in a 160 percent annualized return. Those who waited also profited handsomely. Investors who bought Sept. 30, the last day PeopleSoft traded below $20 per share, will experience a 135 percent annualized return. “This fell into the category of a hostile tender and hostile tenders tend to be very lucrative,” one investor said. PeopleSoft’s board relented to Oracle in December prior to Strine ruling on the legality of the takeover defenses. Strine had urged the parties to resolve the dispute on their own. Oracle said Wednesday that investors had tendered 75 percent of the outstanding shares in PeopleSoft. That effectively gives Oracle control of PeopleSoft. Oracle also said it has taken control of PeopleSoft’s board, designating four individuals to occupy seats recently vacated when PeopleSoft dropped its opposition to the merger. The announcement came just an hour after the initial offering period expired on Oracle’s $26.50 per share proposal. Oracle said it accepted 298,834,574 shares for payment. It also unveiled a subsequent offering the rest of PeopleSoft. That began Wednesday and expires at 8 p.m. Eastern time on Jan. 4. Oracle said it will complete the second-step merger if investors tender at least 90 percent of the outstanding shares of before the subsequent offering period ends. This will let all stockholders who did not tender shares in the initial offering period obtain the $26.50 per share offer price prior to consummation of the second-step merger, Oracle said. Pepper Acquisition Corp. — the vehicle Oracle is using for the merger — will promptly pay for PeopleSoft shares as they are tendered. Shares tendered during the subsequent offering period may not be withdrawn. If Pepper Acquisition Corp. extends the subsequent offering period, it will issue a press release on Jan. 5. Copyright �2005 TDD, LLC. All rights reserved.

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