Ex-PeopleSoft CEO testifies on takeover bid

Conway says reaction may have been too much

October 07, 2004|By BLOOMBERG NEWS

WILMINGTON, Del. - Former PeopleSoft Chief Executive Officer Craig Conway testified yesterday that he may have overreacted to Oracle Corp.'s $7.7 billion hostile bid by attacking its founder, Larry Ellison.

Conway, who described Ellison as "sociopathic" after the June 2003 bid, told a Delaware Chancery Court judge that he decided to vilify Oracle and Ellison as part of an effort to fend off the offer, now valued at $21 a share. Oracle is suing People- Soft, seeking to knock out the company's takeover defenses.

When asked by Oracle lawyer Michael Carroll if he may have gotten "carried away" in the first week after Ellison's offer, Conway told Judge Leo Strine Jr., who is hearing the case without a jury, "I may have."

The testimony followed PeopleSoft's comments this week that the company would be willing to consider a transaction with Oracle at a high enough price. Conway, who was fired last week, said while he was CEO that he wouldn't sell to Oracle under any terms. He rejected Ellison's four takeover offers and filed a lawsuit claiming the Oracle bid cost PeopleSoft more than $1 billion in sales.

PeopleSoft Director Steven Goldby testified Tuesday that he would be willing to discuss a quick takeover by Oracle at the "right price," and PeopleSoft said he was speaking for the entire board.

Oracle is asking Strine to force PeopleSoft to remove two major impediments to the deal: PeopleSoft's stock-diluting poison pill anti-takeover defense and a customer-rebate program. Both would make the acquisition prohibitively expensive.

Oracle, the third-largest maker of software that runs business functions such as human resources, originally offered $16 for each share of PeopleSoft, the No. 2 maker of such software behind Germany's SAP AG. Oracle executives then raised the bid twice to a high of $26 before cutting it to $21 in May, citing a drop in PeopleSoft's market value. The latest offer is valued at $7.7 billion.

In an August videotaped deposition played in court Monday, Conway said he lied last year when he told analysts Oracle's bid was no longer a threat to PeopleSoft customers. He was fired after the PeopleSoft board learned about the deposition.

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