The enemy within... and without

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You know there's a war looming when you pass by Vera Lyn's house and she's gargling! You know when there's the possibilty of a serious takeover bid looming when companies start shoring up their defences.

On the eve of the PeopleSoft/Oracle hostilities, one of the anti-takeover moves that PeopleSoft made was to beef up its employee benefits. In an uncanny echo, Siebel has this week done the same under the guise of wanting to reassure jittery employees gossiping around the water cooler.

Siebel says its actions are being taken to benefit staff, which is nice if it's true. Unfortunately, most people are rather more of the opinion that it's a thinly disguised attempt to put another brick in the wall of 'fortress Siebel' in a bid to deter unwanted advances from Oracle or some other predator.

But I can't help feeling that the danger doesn't come from outside the fortress for Siebel. There's an enemy within in the shape of discontented shareholders. They want Siebel's cash pile of $2 billion distributed or they want the company up for sale. Give us some cash or give us a cash-buyer is the increasingly heard call.

That should be enough to give CEO George Shaheen a few sleepless nights. It might also be keeping Chuck Phillips and Safra Katz over at Oracle up into the wee small hours as they contemplate whether to make a move. In some respects they must dread the prospect: they've only just gotten through the PeopleSoft takeover, there's still a lot of integration work to be done there - do they really need to be thinking about another significant takeover bid?

But timing is everything and the combination of shareholder dissent at Siebel and the company's recent lacklustre financial performance might mean that there has never been a better time to mount a bid. The only thing that's certain is that Tom Siebel's reaction to such a move will make Craig Conway's look like positive co-operation - and Tom still owns a hefty chunk of stock...

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