Oracle, PeopleSoft reach takeover deal of 10.3 billion dollars

Oracle Corp. and PeopleSoft Inc. announced Monday an agreement of 10.3 billion dollars to create the world's second largest maker of business applications software.

The agreement brought an end to a bitter 18-month takeover battle between the two rivals.

Oracle Corp. raised its all-cash offer for PeopleSoft Inc. to 26.50 dollars per share, up from a 24-dollar-per-share bid that PeopleSoft's board had rejected as inadequate, according to reports reaching here Monday.

The final offer represents a 75 percent premium from PeopleSoft's market value before Oracle launched the takeover battle in June 2003.

PeopleSoft has 12,750 customers and an annual revenue of nearly 3 billion dollars. By picking up PeopleSoft, Oracle, which calls itself "the world's largest enterprise software company," hopes to mount a more serious challenge to German software maker SAP's leadership in business applications software -- the computer coding that automates a wide range of administrative tasks.

The takeover is expected to be completed next month. Oracle expects the acquisition to boost its earnings by about 400 million dollars, or 8 cents per share, during the fiscal year ending in May 2006.

For the quarter ended Nov. 30 this year, Oracle earned 815 million dollars, or 16 cents per share, which was a 32 percent increase from 617 million dollars at the same time last year.

The company's revenue rose 10 percent in the quarter to 2.76 billion dollars from 2.5 billion dollars a year ago.

Through November this year, Oracle had already spent more than 110 million dollars in pursuit of PeopleSoft, and PeopleSoft had poured more than 80 million dollars into its takeover defense, according to the reports.