Oracle's CEO Quiet on Merger, but Loud on Options

Larry Ellison said nothing new about the PeopleSoft offer, but said Oracle still preferred options.
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Oracle's

(ORCL) - Get Report

daylong analyst meeting shed no new light on the company's $6.3 billion attempt to buy

PeopleSoft

(PSFT)

.

Oracle execs didn't sweeten the $19.50-a-share offer, and said they have not yet decided what they will do if PeopleSoft completes its friendly acquisition of

J.D. Edwards

(JDEC)

.

Oracle CEO Larry Ellison did say that he will not follow the lead of

Microsoft

(MSFT) - Get Report

and stop compensating employees with stock options. Nor will Oracle expense options. "Expensing options is reasonable -- but Black-Scholes

a method of valuing options is madness," he said.

Ellison called Microsoft's new compensation

plan clever, but said he will continue to compensate employees with options because he believes Oracle shares will continue to appreciate in value.

Clad as usual in a stylish suit over a long-sleeved black T-shirt, Ellison couldn't resist tweaking PeopleSoft CEO Craig Conway for his vituperative reaction to the takeover offer. "At one point, Craigy thought I'd kill his dog," he told an audience of 196 analysts and reporters. "But, if Craigy and Bear (the dog) were standing next to each other and I had only one bullet, trust me, it wouldn't be for the dog," he joked.

More seriously, Ellison and other execs made it clear that the acquisition was very much on the front burner for Oracle and that he is far from giving up. Ellison turned away repeated questions about what he might do to undermine the JDEC deal and clinch the PeopleSoft acquisition. "I don't know what I'd push on. We have to wait for the Department of Justice to finish its review," he said.

The DOJ is currently reviewing Oracle's proposed acquisition and by Monday is expected to say whether or not it intends to delay the J.D. Edwards acquisition by asking for more information.

Ellison said the three-sided battle could last until next June, when PeopleSoft shareholders could elect a new board of directors, or it could end with a victory by one side or another in court. A third possibility, of course, is that the government will block one or both acquisitions.