Oracle versus PeopleSoft Barbarians in the Valley.docx -...

Oracle versus PeopleSoft Barbarians in the Valley
Oracle's hostile bid for PeopleSoft will supply the best evidence yet about whether
the rules of American business are changing
Jun 26th 2003 | NEW YORK
Timekeeper
FANS of the raw-meat variety of capitalism are finding much to admire in
Oracle's hostile bid for PeopleSoft, a big rival in the software business. There is the
theatre: two sworn enemies slugging each other senseless. But there are also the
growing signs that Oracle's bid may come to mark a departure from the previous
rules of business in America. The business culture of the 1990s—defined, above all,
by the consensual business matings that spawned the greatest merger boom in
history—now looks too cosy. As agitation for system-wide reform continues, Oracle's
bid is the latest evidence that managers, boards and shareholders have begun to
play a less friendly game. Nobody knows what the new rules will look like. This
battle may provide the first real clues.
On June 2nd, PeopleSoft said that it would buy J.D. Edwards, a smaller rival.
Four days later, Oracle announced its own bid for PeopleSoft, and invited the firm's
board to talk. Furious that his own plans had been endangered, PeopleSoft's boss,
Craig Conway, called Oracle's offer “diabolical”, and its boss, Larry Ellison, a
“sociopath”—not the worst thing ever said of the colourful billionaire also famed for
his love of things Japanese and trying to win the America's Cup for yachting.
Moreover, said Mr Conway, he “could imagine no price nor combination of price and
other conditions to recommend accepting the offer”. On June 12th, PeopleSoft turned
Oracle down. It said there was a big risk that antitrust authorities would block the
merger; that uncertainty, plus Oracle's stated intention to discontinue PeopleSoft's