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Web of Finance
443 hits
| Feb 17, 2004 10:45 pm |
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re: Oracle4 PeopleSoft |
Ananda Chakravarty
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Melanie,
Your comments on Oracle's takeover bid for Peoplesoft is mostly on the mark. But I still am a believer in Peoplesoft products. It's a company that is worth more than the $16-$20 you suggested. Not just for the incoming cash flow but because of the customer loyalty they have generated - an intangible that is rarely reflected on an income statement or balance sheet. They have a strong customer support team and have consistently upsold and crosssold products to existing customers.
The viability of Oracle buying out PeopleSoft does focus on the regulatory authorities. But I would venture to say that if ORCL purchases PSFT, PSFT is dead. Their assets will dwindle and they will suffer the same fate as those miniature companies that MSFT swallowed up one by one. From ORCL's perspective, this is just removing a major competitive threat. Even if it's a financial loss, Ellison has an incentive to take PSFT out of the market. Too much of ORCL's business has been siphoned out to PSFT and Siebel in the past couple of years, and I can see how this will impact the market as a whole. SAP will be a survivor, but on the fringes only. The CRM/ERP efforts over the last two years have been so dismal that PSFT just can't show it's stuff and bring out a strong sales cycle.
I think ORCL will continue bidding on PSFT until it either replaces a majority of the board (unlikely) or is able to present such a high bid (stock & cash) that it will cause PSFT shareholders to crumble. Hostile takeovers are fun to watch (but not participate in - especially as the acquiree!!!). I'd like to see a poison pill get enforced in this kind of a battle. I doubt there would be any white knights to save PSFT in this fight though - except maybe the government.
Ananda Chakravarty
Private Reply to Ananda Chakravarty (new win) |
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