NEW YORK – Oracle Corp. (ORCL) on Monday said it asked Peoplesoft Inc.'s (PSFT) board of directors to immediately rescind a "poison pill" anti-takeover provision, two days after 61 percent of PeopleSoft shareholders tendered their stock in favor of Oracle's $24-a-share hostile offer.
The two software rivals are scheduled to meet on Wednesday in Delaware Chancery Court, where a judge will evaluate Oracle's request to have PeopleSoft remove the obstacle.
Following its successful tender offer for PeopleSoft shares last week, Oracle has asked PeopleSoft to make the move voluntarily without forcing the decision on the court or waiting until a possible proxy battle for control of PeopleSoft's board of directors next spring.
It is rare for a judge to force the eradication of a company's poison pill, though legal experts say Vice Chancellor Leo Strine, Jr. may choose to consider Oracle's win with PeopleSoft shareholders when he makes his decision.
"I think he'll have to decide what weight, if any, to give to that 61 percent," said E. Norman Veasey, former Delaware chief justice and now a senior partner at law firm Weil, Gotshal & Manges.
Veasey said Delaware's general law is that shareholder rights plans are valid if adopted through the correct procedures, but that "there may come a time when a board of directors must redeem the pill."
Oracle on Monday released a copy of a letter it sent to PeopleSoft's board, which said that it still felt its prior offer of $21 per share was the fair price to pay for its smaller competitor.
"In the spirit of resolving this long running matter for the good of PeopleSoft's shareholders, customers and employees, we raised our offer by $3.00 per share," Oracle said.
Oracle first launched its bid for PeopleSoft in June, 2003.
Oracle shares were off 12 cents, or 0.9 percent, at $12.63 in early trading. PeopleSoft stock was up 14 cents, or 0.6 percent, at $23.31.