PeopleSoft yesterday rejected Oracle's latest hostile takeover offer, setting the stage for a showdown at the company's shareholder meeting on March 25th.
However, in the strongest hint yet that it might be prepared to negotiate over price, PeopleSoft issued a more detailed analysis of its rejection of the $9.4 billion (€7.44 billion) offer, which it called "inadequate".
PeopleSoft also continued to claim there was a "significant likelihood" that the proposed deal would be blocked by antitrust regulators in the US and Europe.
Oracle has said that US regulators are due to rule by March 12th, although the European process is set to take longer.
Oracle last week raised its offer from $19.50 to $26 a share in cash - a level some Wall Street analysts said represented the first clear sign of its determination to complete the deal.
PeopleSoft said the latest bid valued it at a lower multiple of earnings than other enterprise software companies and was below the target set by most analysts.
Based on PeopleSoft's estimate of its earnings this year, Oracle's offer implies a multiple of 27 to 28 times earnings.
By comparison, SAP - widely seen as a stronger company, and the market leader in enterprise application software - trades at 32 times expected 2004 earnings, while Siebel, which is recovering from a deep earnings slump, stands at 46 times prospective earnings.
One person at PeopleSoft also denounced the 18 per cent takeover premium implied by Oracle's latest offer as inadequate, adding that 30-40 per cent would be more normal.
PeopleSoft's decision to make price rather than antitrust considerations the main argument for its rejection was a reversal of its earlier position. This, and the more detailed analysis of the Oracle bid, suggested that last week's gambit from Oracle could have changed the dynamics of the seven-month takeover battle.
