Posted by : trraju on Dec 13, 2004 - 12:49 PM General

SAN FRANCISCO - PeopleSoft Inc. has scheduled its annual meeting for March 25, setting the date for a potentially decisive showdown in a fierce battle to fend off rival Oracle Corp.'s hostile takeover attempt. The meeting date, announced Friday, could mark PeopleSoft's last stand unless the Pleasanton-based business software maker can convince its shareholders that the company is worth more than Oracle's current $9.2 billion bid.
Redwood Shores-based Oracle hopes to wrest control of PeopleSoft's board at the March meeting, unless it wins an upcoming court decision that would enable the deal to close before then.

In preparation for the annual meeting, Oracle last month nominated four pro-takeover directors to replace the PeopleSoft incumbents standing for re-election.

The takeover bid, launched 18 months ago, won support from 61 percent of PeopleSoft shareholders who accepted the offer last month after Oracle threatened to walk away from the proposed deal if it didn't gain majority backing.

But PeopleSoft's board has refused to remove an antitakeover defense known as a "poison pill," insisting the company is worth at least $7 per share more than Oracle's current $24 per share offer.

Oracle is asking a Delaware judge to invalidate the poison pill, but most analysts believe the chances of that happening are remote. After hearing more testimony in the case next week, Judge Leo Strine has indicated he will issue a ruling shortly after the holidays.

The debate over PeopleSoft's market value hinges largely on the company's profit outlook. PeopleSoft's management has painted a rosy picture, forecasting 2005 earnings far above Wall Street's previous expectations. Oracle has argued that PeopleSoft can't be trusted, pointing out that the company failed to deliver the 2004 profits that management initially promised.

With the annual meeting set to occur before the end of 2005's first quarter, PeopleSoft will be under pressure to finish this year with a financial flourish to increase the credibility of its sales outlook for this year.

PeopleSoft's message appears to be gaining more resonance with several analysts who recently raised their earnings estimates after meeting with the company's management. With the recent changes, the 2005 earnings estimate among analysts surveyed by Thomson First Call stands at 86 cents per share - still well below the $1.05 to $1.10 that PeopleSoft expects, excluding certain accounting charges.

Peoplesoft shares closed 1 cent lower, at $23.95 Friday on the Nasdaq Stock Market. Oracle shares shed a penny also, to close at $13.28.

Copyright 2004 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.