NEW YORK (CNN/Money) -
Oracle Corp. raised its offer for rival software maker PeopleSoft about 14 percent to $24 a share early Monday.
The offer, which Oracle said is worth about $9.2 billion, represents about a 16 percent premium from the closing price for PeopleSoft in Friday trading. The previous offer of $21 a share was only 1.1 percent above Friday's close.
Oracle (Research) shares initially fell in pre-market trading on Instinet but were up 10 cents to $12.76 just before the market open. Shares of PeopleSoft (Research) gained $2.43, or about 12 percent, to $23.20 in pre-market trading on Instinet.
PeopleSoft issued a response again Monday urging its shareholders to hold off on accepting the new offer while its board weighs the new offer. But the statement seemed to once again lean against accepting the deal, pointing out that the board and its financial advisors had previously found a $26 a share offer from Oracle to be "inadequate from a financial point of view."
The PeopleSoft statement also pointed out that it has claimed compensatory damages of more than $1 billion plus punitive damages in its unfair business practices suit against Oracle, which is scheduled to go to trial before a jury in California on Jan. 10.
In its statement, Oracle (Research) said the offer is its best and final offer and vowed more court fights if the PeopleSoft board does not remove poison pill provisions of company bylaws designed to fight off Oracle's hostile bid. It said it will withdraw the offer unless a majority of PeopleSoft shares are tendered by November 19, 2004.
Oracle executives said the offer is well above where PeopleSoft shares would be trading if it were not for the existence of the Oracle offer. And they said the current offer would allow Oracle to add to earnings per share, excluding special items, at the end of the first year after the deal is closed, and add to net income per share by the end of the second year.
Oracle first made a hostile bid for PeopleSoft in June 2003. It has fought a series of legal battles to proceed with the offer, including defeating a U.S. Justice Department effort to block the deal on anti-trust grounds and winning European Commission clearance for the deal Oct. 26.
A Delaware Chancery Court judge is expected to decide soon, perhaps this week, on whether PeopleSoft must amend, repeal, or if it can keep a customer rebate program that could potentially raise the takeover cost by at least $2.4 billion.
PeopleSoft's board had rejected all the various Oracle bids, most recently on Oct. 14, when it described the $21-a-share offer as inadequate. But the board was also seen as signaling greater willingness to consider a deal when it fired PeopleSoft Chairman and CEO Craig Conway Oct. 1.