Updated from 2:23 p.m. EDT
After 16 months of adamant opposition to
appears to be softening its stance.
PeopleSoft Director Steven Goldby said in a Delaware courtroom on Tuesday that his company would be willing to discuss a merger if the price was right and there was a "high certainty" that the deal could close quickly. Goldby was testifying in the trial of Oracle's lawsuit against PeopleSoft, which is asking the court to invalidate PeopleSoft's so-called poison-pill, anti-takeover measures.
Separately, analyst Brent Thill of Prudential Securities wrote in a note to clients Tuesday that, "Our sources indicate to us that the new PeopleSoft management team visited the Oracle campus last week. This indicates to us the new PSFT management team is more willing to engage in a dialogue with ORCL to discuss its options."
Thill's note drew a quick denial from PeopleSoft spokesman Steve Swasey. "It's not true. The management team did not meet with Oracle." However, when asked if the board's transaction team -- which does not include paid management -- met with Oracle, Swasey would only say: "That's speculation, and we won't comment on it."
Later in the day, Thill issued a second note to "clarify" his position in which he quoted Kevin Parker, PeopleSoft's co-president, who said there have been no contacts between Oracle and the board or the management team since the initial tender offer was made on June 6, 2003. Thill added that, "We would caution that we have no confirmation that a deal is imminent, but in our opinion, PSFT is more willingly to engage in a dialogue with ORCL regarding its takeover bid."
On Friday, PeopleSoft's board of directors
fired CEO Craig Conway, saying he had lost their confidence. But during a conference call after the surprise announcement the company said Conway's firing was not related to his adamant opposition to the deal.
When Goldby took the stand on Monday, he bolstered that contention, saying Conway had misled analysts in 2003 by telling them Oracle's hostile takeover bid would no longer hurt his company's efforts to recruit new customers.
Realizing the statement wasn't true, PeopleSoft omitted Conway's misleading remarks in a "corrected" transcript filed with the
Securities and Exchange Commission
"We knew that Conway had misspoken and what he had said was untrue," Goldby testified under questioning by Oracle attorney Michael Carroll.
Oracle's most recent offer for the smaller business software company stands at $21 a share, or about $7.7 billion. Although the deal appeared dead at several points, it has recently developed significant momentum. Last month, a U.S. District Court judge ruled against a suit by the Department of Justice claiming that a merger of the two companies would unfairly restrict competition in the market for business software. The government said last week that it will not appeal the verdict.
Conway was replaced by the Pleasanton, Calif., company's popular founder and chairman, David Duffield.
The change in leadership convinced the market that not only is the deal alive, but that Oracle may well up its offer. On Friday, the stock jumped 15% to $22.83 a share. The reaction to Tuesday's move was less dramatic. In recent trading, PeopleSoft's shares gained another 53 cents, or 2.4%, to $22.73 on heavy volume.