Now for the real battle...

So that’s it then. Game over! Craig Conway wins on a technicality - the technicality being the decision by the Justice Department to come out against Oracle’s hostile takeover bid. For all the continuing brave talk from the Oracle camp, it looks pretty much dead in the water now - unless Larry Ellison’s ego is such that he’s ready to bankroll a long running and hugely expensive appeal against the decision.

So what happens next? Well, first up it means the spineless European Commission adjudicators can come to their own delayed impartial decision and announce that by happy coincidence they’ve come to exactly the same conclusion as the Americans. But that’s all a sideshow now.

Then there’s the PeopleSoft AGM. Will Oracle push ahead with trying to get its people on the board? Of course it will. It might not help win the day with the takeover any more, but it’ll annoy the hell out of Craig Conway and that alone will be a price worth paying for Ellison. Whether there’s any chance of getting the Ellison-shock troops inside the enemy’s gates is another matter....

So where did it all go wrong for Oracle? The final bid last week was a corker - and one that should have given PeopleSoft shareholders cause to think long and hard. What went wrong for Oracle was the apparently acceptable idea in Justice Department circles that big is bad. In post Enron America, that’s clearly the prevailing mindset.

What no-one has yet explained - and I suspect none of us need hold our breath for an answer to this one in the near future! - is how a merger of PeopleSoft and Oracle’s apps business can be a good idea when Conway suggests it a year ago and is turned down by Oracle and yet a bad idea when proposed by Ellison and rejected by Conway - who incidentally had no right to turn it down without consulting his shareholders first.

Whatever the rights and wrongs of this whole episode, Ellison was right about one thing: Conway’s outright rejection of Oracle at any price was not appropriate behaviour for the CEO entrusted with the best interests of the shareholders, who really own the company. But then this entire escapade has been underpinned by highly emotive reactions on both sides, although Ellison has managed to conceal his rather better than Conway.

So where to now? Well, several weeks of phoney war until the Justice Department comes up with its official conclusions - and there’s always a tiny, tiny, tiny chance that the final ruling will not be to block the takeover. Then if Ellison chooses not to appeal, it’s back to business. If the PeopleSoft deal is dead, then Oracle will probably look to make another takeover pretty quickly, if only to prove a point, so the likes of BEA and i2 might be as well to get ready for some unwanted attention.

The real burden will now be on PeopleSoft’s management team who need to prove without doubt to their shareholders that their vehement rejection of the Oracle deal was in the best interests of them all. That means tightening up the integration between PeopleSoft and JD Edwards, getting the share price back up and putting the financials back on track. Without the threat of Oracle looming over them, Conway and his team are now left to prove themselves without a bogeyman to blame if it goes wrong. It may yet be that the real battle for PeopleSoft is only just beginning.

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