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Java IoT: Article

Ellison Announces "There Will Be Job Losses"

As Oracle Gets PeopleSoft At Long Last - For $10.3 Billion

(December 13, 2004   9:18 AM) Speaking on CNBC, Larry Ellison this morning conceded what everyone in Silicon Valley had been fearing, in the wake of a successful bid by Oracle for PeopleSoft: "There will be some job losses at PeopleSoft and there will be some job losses at Oracle."

He was speaking after announcing, prior to the opening of the markets in New York, that PeopleSoft's board over the weekend have now agreed that Oracle can acquire 100% of PeopleSoft's stock at a price of $26.50, up from the $24 offer which Oracle had until today always maintained was its "best and final" offer.

In the acquisition agreement thrashed out over the weekend, Oracle and PeopleSoft have agreed to drop legal actions against each other. As to the $2.50 increase, the chairman of PeopleSoft's transaction committee, George "Skip" Battle, commented: "We believe this revised offer provides good value for PeopleSoft stockholders and represents a substantial increase in value from October."

"Today we announced both a great quarter and the agreement to acquire PeopleSoft. This merger gives Oracle even more scale and momentum," said Ellison.

In his CNBC interview Oracle's co-founder and CEO said:

"We just had a great quarter, where the Oracle standalone application business grew 57%, profits were up 32%, earnings per share up 35%, and this PeopleSoft acquisition is going to make our business even stronger."

Asked whether he ever thought the whole hostile takeover of PeopleSoft would have taken so very long - 18 months, from start to today's finish - he said: "Never in my wildest imagination."

Explaining the $2.50 jump in what Oracle is now going to be paying, compared to its "best and final" offer of $24 all through October/November, Ellison explained:

"We were making a lot of assumptions about their business. We didn't have actual information about their business until we were in direct negotiation with PeopleSoft [at the weekend]. As we took a look at their maintenance frame, and how much they were spending and what their revenue actually was, it turns out that that business was even more profitable than we thought."
"It's a good deal for the Oracle shareholders, and we think it's a good deal for the PeopleSoft customers," he added.

The CNBC interviewer asked Ellison why he felt so strongly about PeopleSoft, why he felt he needed to hang on so long, challenge the US government in court, and so on.

"We think it's essential for constructing our applications business," Ellison replied without hestitation.

"We've doubled the number of customers we have in the applications business," he continued. "We're going to increase our sales capacity by 50%, we're going to have a closer relationship with IBM Global Services, and Accenture and EDS, selling applications."

"This makes us a very, very strong No. 2 in the global applications business, and in makes us No. 1 in the United States."

"It makes us No.1 in retail banking and healthcare and governments. This dramatically improved our competitive position and our market share position in our applications business. It will make us a more profitable and stronger company."

It's hard to argue with a man who has just pulled off a ten-billion dollar, hostile takeover.

More Stories By Jeremy Geelan

Jeremy Geelan is Chairman & CEO of the 21st Century Internet Group, Inc. and an Executive Academy Member of the International Academy of Digital Arts & Sciences. Formerly he was President & COO at Cloud Expo, Inc. and Conference Chair of the worldwide Cloud Expo series. He appears regularly at conferences and trade shows, speaking to technology audiences across six continents. You can follow him on twitter: @jg21.

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