In June 2003, PeopleSoft management announced a merger with JD Edwards. Within hours of the announcement, Oracle had launched a hostile takeover attempt of PeopleSoft. Oracle offering increased enormously difficult questions for the PeopleSoft board would question whether PeopleSoft products will continue to support customers and was reluctant to buy PeopleSoft software. The managers were confronted therefore respond with a decision about how to created the range and uncertainty. To reg … Read more »

In June 2003, PeopleSoft management announced a merger with JD Edwards. Within hours of the announcement, Oracle had launched a hostile takeover attempt of PeopleSoft. Oracle offering increased enormously difficult questions for the PeopleSoft board would question whether PeopleSoft products will continue to support customers and was reluctant to buy PeopleSoft software. The managers were confronted therefore respond with a decision about how to created the range and uncertainty. To regain customer trust and analysts, as PeopleSoft’s board adopting a customer Assurance Program, in which customers would receive a cash payment in the event of a takeover. This promise of a cash payment would not only encourage customers to invest in PeopleSoft products, but also a liability to be large enough to Oracle could derail the takeover attempt altogether. The board had to consider, therefore, confronted by the effects of a Customer Assurance Program for the good of the company, its customers and its duties to shareholders with a tender offer.
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from
Robert M. Daines,
Vinay B. Nair,
Davina Drabkin
Source: Stanford Graduate School of Business
24 pages.
Release date: 30 May, 2006. Prod #: CG4A-PDF-ENG
Oracle’s Hostile Takeover of PeopleSoft (A) HBR case solution