PeopleSoft and J.D. Edwards to speed deal
In the ever-lively PeopleSoft and J.D. Edwards merger, the companies have announced they have amended their definitive agreement under which J.D. Edwards will be acquired. The new deal adds a cash component and is designed to allow the two companies to accelerate the completion of the transaction, bring forward the benefits of their combination and increase the accretion to earnings per share for PeopleSoft stockholders, the companies say.
Oracle’s hostile bid to acquire PeopleSoft, which could have scuttled the J.D. Edwards deal, was unanimously rejected by the PeopleSoft board and highly criticized by J.D. Edwards.
The companies report that based upon the closing price of PeopleSoft common stock on June 13, 2003, of $16.92 per share, the consideration for each outstanding share of J.D. Edwards common stock would be $14.33, for a total transaction value of approximately $1.75 billion. The consideration will be paid in the form of $863 million in cash and 52.6 million newly issued PeopleSoft shares, based on J.D. Edwards 122.4 million shares outstanding. Each J.D. Edwards stockholder will have the right to elect either cash or PeopleSoft common stock, subject to proration.
The transaction is expected to boost PeopleSoft's 2004 earnings per share on an adjusted basis, says the company, excluding amortization associated with acquired intangibles, the write-down of deferred revenue and other purchase accounting adjustments. The transaction is expected to close in the third calendar quarter of 2003.
The companies say the amended agreement:
- reaffirms PeopleSoft's and J.D. Edwards' commitment to combine,
- accelerates closing and minimizes customer uncertainty, and
- protects and enhances stockholder value.
In the latest plot twist, PeopleSoft increased its cash offer to J.D. Edwards, and Oracle has increased its offer to PeopleSoft from $5.1 billion to some $6.3 billion. Oracle has also filed suit against PeopleSoft and J.D. Edwards for their efforts to block the deal