Oracle's PeopleSoft usurpers meet the shareholders

Oracle and its director nominees for PeopleSoft's board have met with an influential shareholder group, in an effort to persuade it to recommend 'the opposition' to institutional investors.

The business software maker and its nominees discussed their views on the merger proposal with Institutional Shareholder Services at the meeting on Tuesday, according to Patrick McGurn, a special counsel at ISS. Oracle has proposed replacements for four PeopleSoft board members up for re-election as part of a bid to take over its software rival, which is being blocked by so-called poison pill measures.

"They [the Oracle nominees] were noncommittal on whether they would vote to lift the poison pill," McGurn said. "We've seen some boards use the poison pill to get a higher bid, and others use it to hide behind so they don't have to sell the company."

A recommendation from ISS, which advises pension funds and other institutional investors on how to vote their shares on proxy matters, would aid Oracle's efforts to gain control of PeopleSoft's board at an upcoming annual shareholder's meeting. In turn, this could help Oracle's attempt to acquire PeopleSoft.

PeopleSoft, which rejected Oracle's last bid, has refused to meet with its competitor to discuss a possible merger.

Oracle has publicly stated its last $26-a-share bid is its "final" offer. However, when asked about the current bid, McGurn said Oracle executives left a "little crack of sunlight through the door."

"They said they had no immediate plans to change it," McGurn said. "They didn't repeat their mantra that 'This is the best and final price'".

Oracle and PeopleSoft declined to comment.

ISS met with Oracle executives Chuck Phillips and Safra Catz (co-presidents) and Jeff Henley (chairman) as well as four of the five opposition slate nominees.

To move forward with its takeover bid, Oracle needs PeopleSoft to remove the poison pill and must clear antitrust regulatory hurdles.

Dawn Kawamoto writes for News.com