#1206 2003 · PeopleSoft · Enterprise software
PeopleSoft made a successful Oracle takeover trigger refunds Oracle itself would owe
问题
Oracle's hostile bid scared buyers away from signing PeopleSoft contracts that might get killed after acquisition
背景
In June 2003 Oracle launched a hostile bid to acquire rival PeopleSoft. The announcement alone spooked enterprise customers, who hesitated to sign multi-year software contracts for a product line that Oracle might discontinue after buying it, threatening to strangle PeopleSoft's sales pipeline long before the takeover fight was even decided.
PeopleSoft could reassure customers with verbal promises, but a hostile acquirer's promises mean nothing once it owns the company, and litigation to block the bid outright could take years while sales quietly bled out in the meantime. PeopleSoft needed customer confidence to survive even if Oracle actually won.
换别人会怎么做
Publicly reassure customers that support would continue, or race to court seeking an injunction against the bid - neither made the underlying risk to customers go away, and both left Oracle free to simply wait PeopleSoft's sales pipeline out.
他们看到了什么
A bidder's future ownership is itself an asset a target can attach a liability to. By binding the guarantee to whoever controlled the company, PeopleSoft made Oracle's own victory the event costing Oracle the most.
那一手
PeopleSoft launched a Customer Assurance Program guaranteeing that if an acquisition led the new owner to stop developing or supporting a customer's product within a set window, PeopleSoft - or whoever bought it, Oracle included - would pay that customer two to five times what they'd spent on the software.
为什么管用
The guarantee runs with the company regardless of who owns it, so it can't be waived away by a change of control; it reassures customers with a number, not a promise; and it forces the acquirer to either raise its price to cover the contingent liability or watch sales keep flowing under the guarantee.
值了多少
Over half of new license revenue tied to the guarantee; potential liability hit nearly $800 million - a bill Oracle would owe if it won.
什么时候会失灵
It needs a credible balance sheet to make the guarantee believable and a customer base that values contractual protection over price. A determined, well-capitalized acquirer can simply absorb the liability into its bid and proceed anyway, as Oracle ultimately did.
后来呢
Oracle called the program a 'poison pill' that made the deal financially unworkable and fought it in court and in its bid price; PeopleSoft let the program lapse in 2004 once a friendlier price was negotiated, but it had preserved sales for nearly a year and forced Oracle to substantially raise its offer before finally completing the $10.3 billion deal in 2005.
资料来源
- [1]PeopleSoft renews refund offer to counter Oracle takeover attemptComputerworld, 2003computerworld.com
- [2]Oracle slams PeopleSoft refund offerNBC News, 2003nbcnews.com