Archive for Saturday, October 2, 2004

PeopleSoft fires CEO, Justice clears way for buyout

Analysts expect Oracle to buy software maker

October 2, 2004


— Business software maker PeopleSoft Inc. unexpectedly fired CEO Craig Conway, dumping the feisty leader who engineered the company's dogged resistance to Oracle Corp.'s $7.7 billion takeover bid during a 16-month saga.

Just a few hours after PeopleSoft disclosed Conway's ouster, the U.S. Justice Department said Friday that it won't appeal a court decision removing an antitrust hurdle to Oracle's offer.

Taken together, the news convinced many analysts that PeopleSoft is clearing the decks for an Oracle takeover.

"This thing is over," said analyst David Hilal of Friedman, Billings, Ramsey & Co. "PeopleSoft is going to be sold. The only question is timing and price."

Investors are betting Oracle will sweeten its all-cash offer of $21 per share. Redwood Shores, Calif.-based Oracle has offered as much as $26 per share for Pleasanton, Calif.-based PeopleSoft.

PeopleSoft's shares surged $2.89, more than 14 percent, to $22.74 during Friday's trading on the Nasdaq Stock Market, where Oracle's shares climbed 51 cents, or 4.5 percent, to $11.79.

Oracle said it was pleased that the antitrust case wouldn't be appealed. The company declined to comment on Conway's firing.

PeopleSoft's board replaced Conway with its chairman and founder David Duffield, who also is the largest shareholder. The board appointed chief financial officer Kevin Parker and Phil Wilmington, the company's top sales executive, as co-presidents.

PeopleSoft's board dumped Conway in a meeting late Thursday night, Skip Battle, a company director, told analysts during a Friday conference call.

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