But things got really interesting on Friday, when Oracle in turn offered to buy out PeopleSoft for only about a 6% premium to PeopleSoft's stock price. Analysts see the offer as a defensive move, since the PeopleSoft-JD Edwards merger would create a rival to Oracle that is bigger in the business application market. In its offer, Oracle announced if it was successful in acquiring PeopleSoft, it would cancel the JD Edwards acquisition plan and migrate all PeopleSoft customers to Oracle products.


PeopleSoft is said to be evaluating the offer, but ultimately the company's fate will rest in the hands of shareholders. Rather than try to buy the company directly, Oracle is trying to grab control from the individual shareholders. It's not a sure bet, but it leaves PeopleSoft's destiny in question.

According to Larry Ellison, Oracle's CEO, the two companies were in talks to merge certain applications last year, but were unable to come to terms. It will be interesting to see how this pans out, since Wall Street seems to now be expecting a tech recovery and PeopleSoft shareholders might think their shares will be worth more a year from now than the Oracle offer. Additionally, with the earlier JD Edwards acquisition, PeopleSoft clearly already has a strategy in mind for its own growth.