Three weeks after Oracle Corp. Chief Executive Officer Larry Ellison testified that he might lower a hostile bid for PeopleSoft Inc., Oracle raised it 14 percent and set a Nov. 19 deadline for its smaller rival to accept.
The bid, made yesterday, is for $8.8 billion, or $24 a share, up from $7.7 billion, or $21 a share.
Oracle executives described it as their "best and final" offer. They said they would abandon the 17-month quest for PeopleSoft if a majority of shares weren't tendered by the deadline. If, however, a majority are tendered and PeopleSoft maintains its anti-takeover defenses, Oracle said it would keep fighting the provisions in the Delaware courts.
"We think the time has come for the shareholders of PeopleSoft to determine the outcome," Oracle Chairman Jeff Henley said.
PeopleSoft shares jumped $2.16, or 10 percent, to $22.93, and Oracle rose 9 cents to $12.75 on the Nasdaq stock market.
Analysts and investors said the new bid raised the likelihood that Oracle would win more than 50 percent of PeopleSoft's shares, particularly since a federal judge ruled last summer that an acquisition wouldn't violate antitrust laws.
"I'm fairly confident that most shareholders would be delighted to tender at $24," said Steve Cohen, a PeopleSoft investor with Kellner DiLeo Cohen in New York. "That represents nearly the highest amount they've been offered since this started."
Far less clear is what PeopleSoft's board will do. The board said yesterday that it would consider the latest offer, but gave no timetable. It has rejected all of Oracle's previous offers - including one at $26 a share, which was lowered after PeopleSoft reported disappointing results.
Best-known for its database programs, Oracle wants PeopleSoft's business software to capture more of that market, where Oracle has fared less well. The largest maker of such programs is SAP AG of Germany.
PeopleSoft has fought bitterly to fend off Oracle. Leading the defense was former Chief Executive Officer Craig Conway, who worked at Oracle and was an Ellison protege before moving to PeopleSoft. Conway was ousted last month and replaced by company founder David Duffield, who said he did not return to PeopleSoft to sell it.
Since then, though, some members of the board have said they would entertain new offers.
The Los Angeles Times is a Tribune Publishing newspaper.