Dollars and Jens
Friday, February 27, 2004
ORCL's PSFT takeover bid blocked
The Justice Department said it would file suit to block Oracle Corp.'s $9.4 billion hostile buyout of PeopleSoft Inc. because the proposed takeover would reduce competition in the market for complex software programs used to run corporations and institutions.
This is an interesting game Larry Ellison has been playing; he has threatened to take over PSFT and discontinue support for its products. Many believe he has no intention of actually doing so, and is just trying to scare off new customers from PSFT, who would be reluctant to purchase software or systems that might not be supported a year or two from now. PSFT has thus made a strong attempt to block the takeover; whether blocking the takeover benefits shareholders or not, appearing to be making a strong attempt to block it surely does, at least versus anything else but agreeing to the takeover offer. If it looks like justice is going to block the takeover, that helps PSFT get customers.