Oracle grabs PeopleSoft control

Oracle has taken official control of rival PeopleSoft following this week's decision by PeopleSoft shareholders to tender 75 percent of outstanding stock holdings to the US database and applications giant.

The results of the tender offer take Oracle one step closer to finalising its US$10.3 billion acquisition of PeopleSoft, a mammoth deal first proposed as a hostile bid more than 18 months ago.

Until earlier in December, it had been a marriage resisted vociferously by PeopleSoft executives and board members. But now things are moving full steam ahead.

Oracle officials said a subsequent offering period would begin 29 December and expire 4 January.

Oracle expected to gain at least 90 percent of the outstanding PeopleSoft shares in that second round, paving the way for the acquisition to close by the end of the year.

Oracle founder and chief executive Larry Ellison said the company was ploughing ahead with integration of the two huge firms.

Oracle said it would send four representatives to serve on PeopleSoft's board, replacing PeopleSoft board members who had resigned and giving Oracle majority board representation.

Two board members would remain on the PeopleSoft board until the merger between the companies was completed, according to Oracle.

"We are moving forward quickly with the integration [and] planning process and have been pleased by the level of coordination as we combine the two organisations," said Ellison in a statement.

In a 15 December memo to PeopleSoft employees, Ellison said he would strive to keep the best staffers from both companies, and that the new company's organisational structure would be revealed by 14 January.

Wherever possible, employees would also be informed of their status by that date. Administrative staff were expected to be the hardest hit by redundancies, he suggested.

Ellison's memo also said: "Our overall plan is to retain distinct development and support organisations for the Enterprise, EnterpriseOne and World Software product lines within the combined company.

"The combination only works if we satisfy customers with great products and world-class support, including the ongoing involvement and dedication of PeopleSoft's current development and support teams."

He said Oracle would enhance PeopleSoft's products, with an "expectation" that version 9 of Enterprise and version 6 of EnterpriseOne would be released.

Ellison did not mention partners in the memo but did express his intention to "expand Oracle's current sales capacity with the addition of PeopleSoft's exceptional resources", to continue uninterrupted current professional services engagements of both companies, and to select a team of professionals from both firms to head up marketing for the single entity.