Event
As of 8 December, 2003, the latest developments in Oracle's unsolicited bid to acquire PeopleSoft include:
- On 24 November, 2003, Oracle reiterated its intention to pursue the bid.
- On 17 November, 2003, the European Commission announced it would make a detailed investigation of Oracle's bid for PeopleSoft. The Commission must issue its final decision by March 2004.
- On 6 November, 2003, PeopleSoft shareholders filed a motion in the Delaware Court of Chancery, challenging PeopleSoft's customer assurance programme.
First Take
Oracle's bid is in limbo until the US Department of Justice rules on its antitrust inquiry into the deal. The ruling will likely come between mid-December 2003 at the earliest and February 2004. Although the European Commission can't block the acquisition completely, it can determine how the parties will have to operate in Europe. Gartner anticipates no developments that will substantially alter the situation before the Justice Department's ruling.
Meanwhile, we expect PeopleSoft and Oracle will continue with legal, marketing and financial moves to advance their respective positions. Oracle will likely reiterate that it is pursuing the bid and that success is just a matter of time; PeopleSoft will likely insist that Oracle's bid has failed and that PeopleSoft has moved on. PeopleSoft's 3Q03 financial performance shows that the company has been able to focus on business as usual. Joint PeopleSoft and J.D. Edwards teams will continue working on product road maps (see "PeopleSoft's New Strategy Depends on Cross-Selling, Service Goals"). As it pushes out its latest release of its e-business suite, Oracle will continue legal and financial manoeuvres to remove the significant hurdles it faces in completing the deal. We see nothing on the immediate horizon to indicate a lessening of these hurdles. To develop an opinion on the potential effects of Oracle's bid, consider all the elements that could affect the outcome of this action (see "Pivotal Factors Affecting Oracle's Bid for PeopleSoft").
Advice to Clients
Until the Justice Department rules on this case, Gartner continues to advise clients considering PeopleSoft and J.D. Edwards offerings to use Gartner's decision frameworks to determine their strategy. We have updated these frameworks to reflect recent developments. The frameworks yield different advice, depending on a combination of risk tolerance, your opinion on the outcome of Oracle's bid and you company's position in the application life cycle (see "Updated Advice for PeopleSoft Enterprise Clients" and "Updated Advice for PeopleSoft EnterpriseOne Clients").
