Oracle Lowers Price in PeopleSoft Offer

The hostile bid, which was previously rejected by the Justice Department, is cut to $7.7 billion.
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Like a snubbed groom who won't let the wedding guests leave,

Oracle

(ORCL) - Get Report

announced Friday that it is lowering its all-but-doomed buyout offer for

PeopleSoft

(PSFT)

.

Oracle, whose bid was blocked on competitive grounds by the Justice Department in February, cut the hostile PeopleSoft offer to $21 a share, or about $7.7 billion. The previous offer was for $26 a share, or about $9 billion.

"Our revised offer reflects changes in market conditions and in PeopleSoft's market valuation," said Oracle Chairman and CFO Jeff Henley.

PeopleSoft closed at $17.30 Friday, well below its 52-week high of $24.04 a share. In recent after-hours trading, shares were off 31 cents, or about 2%. Oracle was off 17 cents after hours to $11.60.

"Our new offer represents a premium of 21% over PeopleSoft's closing price today of $17.30," Oracle said. "That's a higher premium than our previous offer was on the date made, calculated on both a single day and 30-day moving average basis. I believe that this deal will benefit stockholders of both companies."

The company is currently trying to get around the Justice Department's anticompetition ruling in court. A preliminary hearing is scheduled in the case for June 7.

Oracle also announced that it has extended its previously announced tender offer for all of the common stock of PeopleSoft to July 16, 2004. The tender offer was previously set to expire at midnight EDT on Friday, June 25, 2004. As of the close of business on May 14, 2004, a total of 7,906,545 shares stood as tendered in the offer.