Ajith Jacob

EB-002
1. How much the stakeholders of Oracle will benefit from the takeover?
As the case illustrates it was a hostile takeover attempt, hence the shareholders of
oracle did not perceive to have any benefits. Only a marginal premium of 6% was offered
to the shareholders. The normal premium was at least 10 % to up to 50 %, people soft
was undervalued. The takeover was a transparent attempt to disrupt the industry
leadership of people soft. Oracle was not looking at the synergies but to pre-empt the
competition and be the leading one stop solution to all ERP needs. The stakeholders were
badly affected by the hostile takeover move, because it was very clear that the people soft
brand will be no more, hence customers will be badly affected. The employees future was
questionable, as they might retain only what is required for them in Peoplesoft.

2. Are all stakeholders equally affected?
No, the most affected is the employees and customers. This is because the
shareholders will at least have recouped their investment. The customers who have
invested millions of dollars in ERP will be worried about the continued support and
backup of people soft. The employees will be at the mercy of Oracle as they will want
only the key resources. The other stakeholder affected was J D Edwards, as it was
proposed to be taken over by Peoplesoft.
3. How is the takeover likely to affect PeopleSoft shareholders?
Shareholders though felt that the oracles offer was undervalued, they were
looking for opportunity to hive off the company for quite some time. The takeover would
have at least paid back the shareholder investments, because the industry is through a
turbulent period and is mature, so it is highly risky. The takeover bid as a ploy has
destroyed the shareholders value, because it has affected the present and the potential
client base badly affecting the sales. It tossed the proposed merger with J D Edwards
which was an value adding offer for Peoplesoft.

4. How does the case highlight the tussle between the stakeholders of the firm?
The tussle is very clear between the shareholders and the employee (CEO). The
CEO was not in favour of the takeover and it is evident from his words, whereas the
shareholders were looking for an opportunity to exit. Once the shareholders realized it
was an undervalued offer, they rejected it. Then they had to cover up for the damages
done by trying to implement Customer Assurance Programme.

5. Considering the overall impact (value from takeover and long term effects) was the
deal worth the effort.
No the deal was not worth from Peoplesofts side, they were not valued properly, their
whole operations were damaged and all stakeholders was affected badly.
Ajith Jacob
EB-002
Yes the deal was worth when considered from the Oracles point of view. They have
successfully pre-empted the competition by damaging the Peoplesoft expansion plan and also
destroyed their customer loyalty.