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Oracle raises 'final' PeopleSoft bid to $9.2b

SAN FRANCISCO -- Oracle Corp. sweetened its hostile bid for rival business software maker PeopleSoft Inc. to $9.2 billion yesterday, a 14 percent increase aimed at resolving the long-running takeover battle between the bitter foes.

The new all-cash bid of $24 per share raises the stakes from $21 per share -- an offer that Pleasanton, Calif.-based PeopleSoft rejected as inadequate in May.

It marked the fourth time that Redwood Shores-based Oracle has revised its bid since it began its attempt to buy PeopleSoft nearly 17 months ago.

Oracle described its latest bid as its ''best and final offer," setting the stage for the climactic scenes in a Silicon Valley soap opera that has featured courtroom confrontations and catty remarks.

The company punctuated its take-it-or-leave-it ultimatum with a promise to abandon the takeover attempt if a majority of PeopleSoft's shareholders hasn't accepted the new offer by a midnight Nov. 19 deadline.

''We think the time has come for the stockholders of PeopleSoft to decide the outcome," Oracle cairman Jeff Henley said yesterday in a conference call with analysts.

In a statement issued yesterday, PeopleSoft's board advised the company's shareholders to take no action until the directors reviewed Oracle's latest offer ''in due course."

The board's statement noted that in February it rejected an Oracle offer of $26 per share -- the highest bid made since the stand-off began.

Through last week, Oracle said only 20.2 million PeopleSoft shares -- about 5 percent of the outstanding stock -- had accepted the $21-per-share offer.

The latest bid represents a 59 percent premium above PeopleSoft's stock price before Oracle first launched its bid in June 2003.

It makes sense for Oracle to draw a line in the sand because the ordeal has become a distraction for both companies, said AMR Research analyst Bruce Richardson.

The momentum in the takeover struggle shifted in Oracle's favor in early September when a federal judge rejected a Justice Department lawsuit that sought to block the proposed combination on antitrust grounds.

Europe antitrust regulators provided Oracle another boost last week by dropping their objection between two of the world's three largest makers of business applications software.

Oracle believes a PeopleSoft takeover would create an even more profitable company that's better equipped to compete with business applications software leader SAP of Germany, and more diversified technology giants Microsoft Corp. and IBM Corp.

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