The price that Oracle Corp. will have to pay to acquire PeopleSoft Inc. has risen US$1 billion to US$7.5 billion following PeopleSoft’s acquisition of J.D. Edwards & Co., Oracle said in a filing to the U.S. Securities and Exchange Commission (SEC) on Thursday.
Oracle said it is sticking to its US$19.50 purchase offer for each PeopleSoft share, and calculated that there are an extra 53 million shares outstanding as a result of PeopleSoft’s agreement to buy J.D. Edwards.
“Neither the completion of the J.D. Edwards exchange offer nor the subsequent second-step merger will change the effectiveness of our offer,” Oracle said in the filing. “Former J.D. Edwards stockholders who receive PeopleSoft shares…will be able to participate in our offer by tendering their shares in the same manner as any other PeopleSoft stockholders.”
Oracle said it has about US$6.5 billion of cash and other liquid assets on hand, and has been promised a US$5 billion credit facility by Credit Suisse First Boston Corp. Oracle will therefore have enough funds to pay for the PeopleSoft acquisition wholly in cash, Oracle said in the filing.
Oracle also said it expected to extend its Aug. 15 expiry date for the offer, effectively until it has won control of PeopleSoft.
“We currently expect that the offer will be extended until the principal conditions to the offer…are satisfied,” Oracle said in the filing.
Those conditions include that the number of shares held by Oracle and its subsidiaries, plus shares validly tendered and not withdrawn under the offer “represents at least a majority of the total number of shares outstanding on a fully diluted basis,” Oracle said.