With Oracle and PeopleSoft now operating as one, we would like to take this opportunity to pledge our continued commitment to the success of your business and detail some of the benefits we expect our merger will deliver.

We are uniting a spectacular group of people and products with a single vision and common purpose. Together we will build on the complementary talent and momentum that each of us had independently. This combination gives us the scale necessary to invest more in research and development, which will accelerate innovation and help you become more efficient and competitive.

As always, our primary goal is 100% customer satisfaction. We are dedicated to maintaining and increasing the quality of support and service you have come to expect from Oracle and PeopleSoft, without interruption. Support procedures for PeopleSoft and Oracle products on your current environments are unchanged, so you should continue to use the same channels you've been using. You will continue to receive world-class support for your software investments.

Oracle will continue to enhance the PeopleSoft product lines, and we will release a next version of both the Enterprise and EnterpriseOne products. We are committed to supporting PeopleSoft Enterprise Version 8 until at least 2013, and we will continue to support the World product according to existing PeopleSoft policies.

We have already begun development planning for the Java-based successor product. Our goal is to bring together the best features and functionality of the Oracle and PeopleSoft product sets, drawing on Oracle's traditional strength and leadership in infrastructure and incorporating a modern, standards-based architecture.

Together, Oracle and PeopleSoft provide a more compelling one-stop shop, giving you access to a full range of integrated enterprise software as you seek to simplify your existing information technology environments.

We are officially launching our combined company on Tuesday, January 18, 2005, and hope that you will join us online to hear more about the value this merger will provide to you. Details about the launch and other important information about the merger, including local numbers for our Customer Care Centers, can be found at oracle.com/peoplesoft.

We appreciate your continued support.

Jay Wrolstad, www.newsfactor.com

At the same time, PeopleSoft announced the resignation of company founder and CEO David Duffield.

To speed completion of the US$10 billion deal, announced earlier this month, Oracle has extended its tender deadline to January 4, 2005, with the goal of obtaining at least 90 percent of PeopleSoft shares.

Oracle Has Board Majority

Oracle already has designated four representatives to serve on PeopleSoft's board of directors, replacing the PeopleSoft board members who have resigned and giving Oracle majority board representation. Two of the previous PeopleSoft board members will remain on the PeopleSoft board until the merger is finalized.

The merger agreement, announced two weeks ago, ended an 18-month hostile takeover attempt. Oracle last month made its "best and final" offer of $24 per share ($9.2 billion) for PeopleSoft.

Following that offer, Oracle said an estimated 60 percent of PeopleSoft's outstanding shares were tendered by stockholders. Oracle later agreed to pay $26.50 per share in order to end resistance from PeopleSoft's board of directors, which had vowed to continue to fight the purchase.

Duffield Takes His Leave

PeopleSoft announced Duffield's resignation in a corporate filing with the SEC, spokesperson Steve Swasey told NewsFactor. In October, Duffield returned to the CEO post when PeopleSoft's board of directors dismissed Craig Conway, who had taken the reins in 1999.

Duffield and Ken Morris founded PeopleSoft in 1987, introducing its first human resources applications, built on a client-server architecture.

Challenges for Oracle

The merger was expected, say analysts, and Oracle now faces the challenge of recouping its huge investment. "They have to articulate their roadmap, moving the PeopleSoft products forward to retain that customer base," Yankee Group program manager Sheryl Kingstone told NewsFactor.

From a business perspective, Oracle eliminates a serious rival and gains the application development of PeopleSoft through this merger, she said. "For Oracle, the customer-interaction technology from PeopleSoft is a big benefit."

Oracle could not be reached for comment this morning.

Reuters,8 December 2004

http://www.reuters.com/newsArticle.jhtml?storyID=7033748

Oracle set to pounce on PeopleSoft

But takeover target's board refuses to budge

The Associated Press

Updated: 12:51 p.m. ET Nov. 22, 2004

SAN FRANCISCO - Bolstered by investors, Oracle Corp. appears destined to complete its long-sought takeover of PeopleSoft Inc. unless its rival becomes more profitable and proves it is worth more than the $9.2 billion bid currently on the table.

The owners of about 61 percent of PeopleSoft’s stock implicitly endorsed Oracle’s latest $24-per-share offer by tendering their shares before a pivotal weekend deadline. Had most of the shareholders followed the advice of PeopleSoft’s board and withheld their shares, Redwood Shores, Calif.-based Oracle planned to rescind its all-cash offer and end a 17½-month quest.

Despite the shareholder rebuff, PeopleSoft isn’t ready to surrender because its board believes the business software maker is worth at least $2 per share — nearly $800 million — more than its rival’s current offer.

On Saturday, PeopleSoft’s board of directors again unanimously concluded that Oracle’s latest bid was inadequate, continuing to insist that most of the company’s largest stockholders don’t think the offer reflects the company’s real value.

“This majority is comprised of stockholders who did not tender their shares, as well as stockholders who tendered but told us that they believe PeopleSoft is worth more than $24 per share,” George “Skip” Battle, the lead director on PeopleSoft’s transaction committee, wrote in a letter to Oracle executives.

It marked the sixth time that PeopleSoft’s seven directors have snubbed its bitter rival since the takeover battle began. Unless Oracle raises its offer, PeopleSoft’s board has signaled it is ready to fight until shareholders take a more definitive vote on the bid at the company’s annual meeting next spring.

Sounding exasperated, Oracle chairman Jeffrey Henley urged PeopleSoft’s board to capitulate in a letter released Monday. “Your shareholders have more than a year and a half to evaluate our offer relative to your stand-alone plan and they have chosen Oracle’s offer,” Henley wrote.

Despite the continuing impasse, investors still seem to expect the deal to get done. PeopleSoft’s shares gained 14 cents Monday to $23.31 on the Nasdaq Stock Market, where Oracle’s shares fell 19 cents to $12.56.

'Poison-pill' defense
Pleasanton, Calif.-based PeopleSoft can still hold out because it remains armed with an antitakeover measure known as a “poison pill” to thwart Oracle’s advances. If Oracle acquires a 20 percent stake in PeopleSoft, the company can trigger the poison pill to flood the market with new shares to make a takeover prohibitively expensive.

Oracle is prepared to ask a Delaware judge to remove the poison pill in a Wednesday hearing. The chances that Judge Leo Strine will grant Oracle’s request are considered remote, setting the stage for the Silicon Valley soap opera to continue until PeopleSoft’s annual meeting, which still hasn’t been scheduled.

If PeopleSoft’s poison pill remains intact and the company’s board remains intractable, Oracle will have to lobby PepleSoft shareholders to vote for a slate of directors who support the takeover bid.

PeopleSoft is betting that it will be able to deliver financial results well above analyst expectations before the annual meeting to impress shareholders.

If that happens, PeopleSoft stands a good chance of persuading shareholders it’s worth more than Oracle’s offer. Analysts say Oracle would then have to raise its bid or finally give up the hunt.

But if PeopleSoft’s sales sputter, shareholders almost certainly will vote in favor of an Oracle takeover to finally seal the deal.

“PeopleSoft has definitely put itself in a tough spot,” American Technology Research analyst Donovan Gow said. “They are going to be under a lot of pressure to deliver.”

The often-vicious battle already has taken a heavy toll beyond the $169 million that the two companies have combined to spend fighting each other so far.

Warding off Oracle has required PeopleSoft to divert resources and management attention from its own business as it navigated through its own takeover of J.D. Edwards & Co. PeopleSoft is so convinced that Oracle’s bid represents malicious mischief that it is suing for more than $1 billion in damages in a trial scheduled to begin Jan. 10.

Oracle’s sales and stock price also has suffered during the takeover saga. What’s more, Oracle has had to delay other possible acquisitions while it continued to stalk PeopleSoft — the most prized company on its shopping list.

Some industry observers believe Oracle and its flamboyant CEO Larry Ellison — the mastermind behind the takeover bid — should give up on buying PeopleSoft if a friendly deal isn’t worked out soon. That way, Oracle could use its $9.4 billion in cash to buy other attractive software acquisition candidates, such as BEA Systems Inc.

“Larry should just give up and walk away at this point,” said Salesforce.com CEO Marc Benioff, a former Oracle executive who worked closely with Ellison. “He has already done enough damage to PeopleSoft.”

But analysts believe a combination of ego and PeopleSoft’s high value to Oracle will extend the takeover tug-of-war. The company already has demonstrated its resolve by overcoming the federal government’s antitrust challenge to the proposed deal in a court trial — another victory that has yet to pay dividends.

“Oracle has always been playing for keeps in this thing,” said Joshua Greenbaum, principal analyst with Enterprise Applications Consulting. “I think Larry definitely will keep going ’whole hog’ after PeopleSoft.”

© 2004 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Oracle Advances in Bid to Take Over PeopleSoft as Most Shareholders Show Readiness to Sell

By DAN CARNEVALE

The owners of more than 60 percent of PeopleSoft's stock indicated on Friday that they would sell their shares to the Oracle Corporation, bringing Oracle another step closer to taking over its software rival. PeopleSoft makes a number of products used widely in higher education.

The development came as a disappointment to some college officials who use PeopleSoft software. The officials have frequently expressed concern that Oracle will take over the company and eventually force PeopleSoft users to switch to Oracle products. Oracle officials have said repeatedly that they have no such plans (The Chronicle, February 20).

PeopleSoft shareholders had until midnight on Friday to decide whether to tender their stocks at $24 per share. Oracle said that the bid would be its final offer and that it would walk away from its proposed $9.2-billion hostile takeover if a majority of the shareholders did not agree to sell.

But the merger is still not a done deal because PeopleSoft has a provision in its bylaws, called a "poison pill," that is designed to frustrate a hostile suitor.

Mike Ten Eyck, president of the Higher Education User Group, which represents about 345 colleges that rely on PeopleSoft products, said on Saturday that he was not surprised by Friday's development. But he is not giving up hope that PeopleSoft can prevent an Oracle takeover, despite the shareholders' apparent preference for it.

The shareholder action is "only significant if the poison pill gets dropped, which doesn't seem likely," said Mr. Ten Eyck, who is also manager of administrative information systems at Texas Christian University. "So the saga continues."

PeopleSoft's poison pill is designed to take effect once another company controls more than 20 percent of the shares. Were that to happen, the PeopleSoft board would issue a flood of new shares, making a takeover prohibitively expensive. Oracle has sued PeopleSoft to force the removal of the poison pill. That trial is under way, but experts say that judges usually do not strike down poison pills.

If the courts let the poison pill stand, Oracle may try to force PeopleSoft to abandon the poison pill through a proxy fight during PeopleSoft's next shareholder meeting, in March. At that time, Oracle could try to persuade PeopleSoft shareholders to replace the current board with one that is open to the merger.

To avoid such a fight, Oracle is trying to coax PeopleSoft's board members to drop the poison-pill provision voluntarily.

"We believe it is time to bring this matter to a close, for the good of PeopleSoft's shareholders, customers, and employees," said Jeff Henley, chairman of Oracle's board, in a written statement. "We are prepared to complete and pay for the acquisition of all of the outstanding shares of PeopleSoft upon satisfaction of the remaining conditions, which are all in the control of the PeopleSoft board."

Oracle tried to arrange a meeting with PeopleSoft over the weekend, to close the deal before the markets open this morning, but PeopleSoft officials refused to meet. In a written statement, PeopleSoft said the company would continue to fight the takeover.

"Based on the numerous conversations we have had with our largest stockholders over the past 10 days, the board believes that a majority of our stockholders agree that Oracle's $24 offer is inadequate and does not reflect PeopleSoft's real value," said A. George (Skip) Battle, chairman of the company board's transaction committee, which consists of independent directors. "We are confident that in the time leading to our 2005 annual meeting, we will continue to demonstrate PeopleSoft's superior value to our stockholders."

Business analysts say PeopleSoft is unlikely to give up easily. Jeff Gould, chief executive officer and director of research at Peerstone Research, said PeopleSoft would try to show that the company's revenue had increased before the shareholder meeting last March, hoping to force Oracle to raise its offering price. But the burden of proof seems to have shifted to PeopleSoft, he said, considering that the owners of a majority of the shares indicated that they would be willing to sell to Oracle.

"If they vote the same way in March that they did this week, then Oracle wins," Mr. Gould said. "The truth is, nobody really knows what the world will look like in six months."

Oracle has been seeking to buy PeopleSoft for 17 months. The corporation has changed its offering price five times and set deadlines again and again, only to extend them. Oracle has offered as little as $16 per share and as much as $26 per share, and each time the PeopleSoft board has rejected the offer.

As of the Friday deadline, Oracle said that it would be able to buy 228.7 million out of about 376 million shares, just over 60.8 percent of the total. Because the poison-pill provision deters Oracle from actually buying the shares, the company has extended the deadline again, to December 31.

PeopleSoft's stock price closed on Friday before the deadline at $23.17 per share. Oracle's closed at $12.75 per share.

Oracle had to overcome many hurdles to reach this point. The U.S. Department of Justice sued Oracle in federal court to block the takeover as anticompetitive. The government argued that only three companies -- Oracle, PeopleSoft, and Germany-based SAP -- could offer large-scale systems of human-resource and business-finance software. A judge ruled for Oracle in September (The Chronicle, September 24), and the Justice Department decided not to appeal (The Chronicle, October 15). European regulators also decided, in October, that the merger would not be anticompetitive.

PeopleSoft fired its chief executive officer, Craig Conway, in October. Mr. Conway, who used to work for Oracle's chief executive officer, Larry Ellison, passionately opposed the merger. The board's dismissal of Mr. Conway was interpreted by some observers as indicating its openness to the idea of a merger, if the price was right.

But Mr. Conway was replaced by David A. Duffield, PeopleSoft's founder and chairman, who some experts say is unlikely to let go of the company he created.

PeopleSoft has also filed a $1-billion lawsuit against Oracle for allegedly engaging in unfair business practices. That case is scheduled to go to trial in January.

PeopleSoft Comments on Oracle's Unsolicited Tender Offer Results

PLEASANTON, Calif. -- November 20, 2004 -- PeopleSoft, Inc. (Nasdaq: PSFT) today responded to Oracle Corporation's (Nasdaq: ORCL) announcement of the results of their unsolicited $24 per share tender offer.

PeopleSoft's Board of Directors has met and considered the results of Oracle's unsolicited tender offer and unanimously reaffirmed its previous conclusion that Oracle's latest offer is inadequate and that the Company is worth substantially more than the $24 per share offered by Oracle. The Board reiterated that it will not sell the Company for less than it is really worth and that the Company's business plan creates superior value for stockholders.

A. George "Skip" Battle, Chairman of the Transaction Committee of independent directors, said, "Based on the numerous conversations we have had with our largest stockholders over the past ten days, the Board believesthat a majority of our stockholders agree that Oracle's $24 offer is inadequate and does not reflect PeopleSoft's real value. This majority is comprised of stockholders who did not tender their shares, as well as stockholders who tendered but told us that they believe PeopleSoft is worth more than $24 per share. We are confident that in the time leading to our 2005 Annual Meeting we will continue to demonstrate PeopleSoft's superior value to our stockholders."

On November 10th, prior to announcing that the Board had concluded that Oracle's offer is inadequate, members of the Transaction Committee contacted Oracle and advised them that the Company would be willing to discuss an offer made by Oracle at an appropriate price -- but not $24. The Transaction Committee members told Oracle that its price must reflect both PeopleSoft's intrinsic value and the fact that PeopleSoft is materially more valuable to Oracle now than it was when Oracle made its inadequate $26 per share offer.

Oracle's only response has been to repeatedly state that its $24 per share offer is "best and final" and that it will not pay a penny more to PeopleSoft stockholders.

In making its recommendation, the Board considered, among other things:

Substantial sequential growth forecast for fourth quarter 2004: PeopleSoft continues to demonstrate strong sales execution and entered the fourth quarter with a robust pipeline. The Company anticipates substantial sequential growth in license revenue and pro forma and GAAP earnings per share. Specifically, PeopleSoft anticipates that license revenue will be in the range of $175 million to $185 million with total revenue between $700 million and $715 million. Operating margin for the quarter is expected to be in the range of 16% to 18% (pro forma) and 11% to 13% (GAAP). The Company expects to report pro forma and GAAP earnings per share between $0.20 and $0.22 and between $0.14 and $0.16, respectively. For the full year 2004, the Company expects total license revenue between $600 million and $610 million with record total revenue of approximately $2.7 billion.

Strong momentum reflected in guidance for 2005: The Company expects strong momentum in 2005 due primarily to continued growth in license revenue; a growing maintenance revenue stream; focusing on operating efficiency and lowering costs; and the full year benefit of the cost and revenue synergies from the J.D. Edwards acquisition. For 2005, the Company expects license revenue of $640 million to $655 million, an increase of 5% to 10% and total revenue of $2.8 billion to $2.9 billion, representing 4% to 8% growth. The Company also anticipates pro forma operating margins for the year in excess of 20% and GAAP operating margins in excess of 16%. 2005 pro forma earnings per share are expected to be between $1.05 and $1.10 and GAAP earnings per share are expected to be in the range of $0.82 to $0.87. Guidance for 2005 does not include any potential benefit from the elimination of the Oracle overhang.

Alameda lawsuit against Oracle seeking damages in excess of $1 billion goes to trial in January: PeopleSoft claims compensatory damages of more than $1 billion plus punitive damages in the Company's lawsuit against Oracle, which is scheduled to go to trial before a jury in Oakland, California, on January 10, 2005. PeopleSoft's complaint alleges that Oracle has engaged in unfair business practices, including a deliberate campaign to mislead PeopleSoft's customers and disrupt its business.

The Board reaffirms that PeopleSoft is a vibrant, strong Company with a focused, motivated management team and employee base dedicated to executing on the Company's plan. PeopleSoft will continue to deliver shareholder value by extending its current product leadership, building new products, entering new markets and continuing to deliver the very best customer service in the industry.

About PeopleSoft
PeopleSoft (Nasdaq: PSFT) is the world's second largest provider of enterprise application software with 12,750 customers in more than 25 industries and 150 countries. For more information, visit us at www.peoplesoft.com.

Forward-Looking Statements
This press release may contain forward-looking statements that state PeopleSoft's intentions, beliefs, expectations, or predictions for the future. Forward-looking statements often include use of the future tense, words such as "will", "intends", "anticipates", expects", and similar conditional or forward-looking words and phrases. You are cautioned that these statements are only predictions and may differ materially from actual future events or results. All forward-looking statements are only as of the date they are made and PeopleSoft undertakes no obligation to update or revise them. Forward-looking statements in this press release include those relating to PeopleSoft's anticipated future revenues, operating margins and earnings per share and other statements relating to the Company's future prospects, actions and performance and the lawsuit against Oracle scheduled to go to trial in January 2005. Forward-looking statements are subject to a number of risks, assumptions and uncertainties that could cause actual results to differ materially from those projected in such forward-looking statements. These risks, assumptions and uncertainties include, but are not limited to: the costs and disruption to PeopleSoft's business arising from the Oracle tender offer and related litigation; the Company's ability to successfully complete the integration of J.D. Edwards into PeopleSoft and to achieve anticipated synergies; economic and political conditions in the U.S. and abroad; the ability to complete and deliver products and services within currently estimated time frames and budgets; the ability to manage expenses effectively; the ability to achieve revenue from products and services that are under development; competitive and pricing pressures; and other risks referenced from time to time in PeopleSoft's most recent annual report on Form 10-K and subsequently filed quarterly reports on Form 10-Q, each as filed with the SEC and available without charge at www.sec.gov and www.peoplesoft.com.

Important Additional Information
PeopleSoft's Board of Directors will be soliciting proxies for use at the 2005 Annual Meeting of Stockholders, and any adjournment or postponement thereof, to vote in favor of a slate of directors to be nominated by the Board of Directors and to vote on any other matters that properly come before the 2005 Annual Meeting. Promptly after filing its definitive proxy statement for the 2005 Annual Meeting with the SEC, PeopleSoft will mail the 2005 Proxy Statement and a WHITE Proxy Card to each PeopleSoft stockholder entitled to vote at the Annual Meeting.

PeopleSoft has engaged Innisfree M&A Incorporated to assist it in soliciting proxies from its stockholders. PeopleSoft has agreed to pay customary compensation to Innisfree M&A Incorporated for such services and to indemnify Innisfree M&A Incorporated and certain related persons against certain liabilities relating to or arising out of the engagement. Certain representatives of Citigroup Global Markets Inc. and Goldman, Sachs & Co., financial advisors to PeopleSoft, and directors, officers and employees of PeopleSoft may solicit proxies for the 2005 Annual Meeting, although no additional compensation will be paid in connection with any such solicitation.

PeopleSoft has filed a Solicitation/Recommendation Statement on Schedule 14D-9 regarding Oracle's tender offer that contains information regarding the potential interests of members of the Board of Directors and members of management in the tender offer. Information regarding securities ownership by certain members of the Board of Directors and certain members of management as of February 10, 2004 is contained in PeopleSoft's definitive proxy statement for the 2004 Annual Meeting of Stockholders, dated February 20, 2004. PeopleSoft stockholders should read the Schedule 14D-9 and the 2005 Proxy Statement when it is filed with the SEC (including any amendments to such documents) because these documents contain (or will contain) important information. The 2005 Proxy Statement (when filed), the 2004 Proxy Statement, the Schedule 14D-9 and other public filings made by PeopleSoft with the SEC are available without charge from the SEC's website at www.sec.gov and from PeopleSoft at www.peoplesoft.com.

Non-GAAP Financial Measures

The Company utilizes financial measures that are not prepared in accordance with generally accepted accounting principles in analyzing financial results because the Company believes that they are useful to investors and management in evaluating the Company's ongoing financial performance. These non-GAAP financial measures may be different from non-GAAP financial measures used by other companies.

These non-GAAP financial measures facilitate making historical comparisons by excluding the impact of certain events, such as the costs associated with responding to Oracle's hostile tender offer and the purchase accounting impact of the acquisition of J.D. Edwards. These events might otherwise obscure the results of our ongoing business activities when compared to our competitors or our own historical performance. In addition, presentation of these non-GAAP financial measures enables investors to evaluate the Company's performance under both the GAAP and pro forma measures that management and the Board of Directors use to evaluate the Company's performance.

Non-GAAP financial measures should not be considered as a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP. Where non-GAAP financial measures have been included in this press release, the Company has reconciled GAAP as currently in effect to the non-GAAP measures in the table below. These non-GAAP financial measures may be different from non-GAAP financial measures used by other companies.

Contacts
Steve Swasey
PeopleSoft, Inc.
Public Relations
(925) 694-5230
steve_swasey@peoplesoft.com

Bob Okunski
PeopleSoft, Inc.
Investor Relations
(877) 528-7413
bob_okunski@peoplesoft.com

Joele Frank/Eric Brielmann
Joele Frank, Wilkinson Brimmer Katcher
(212) 355-4449
jf@joelefrank.com/ewb@joelefrank.com

PeopleSoft Board of Directors Unanimously Recommends
Stockholders Reject Oracle's Offer

Oracle Offer Substantially Undervalues PeopleSoft

PLEASANTON, Calif. – November 10, 2004 – PeopleSoft, Inc. (Nasdaq: PSFT) announced today that its Board of Directors voted unanimously to recommend that PeopleSoft stockholders reject Oracle Corporation’s (Nasdaq: ORCL) amended unsolicited offer to purchase all PeopleSoft shares for $24.00 per share.  The Board recommends that PeopleSoft stockholders not tender their shares to Oracle.

The Board made its recommendation after careful consideration of the amended offer, including a thorough review with its financial and legal advisors, and acted upon the unanimous recommendation of its Transaction Committee of independent directors.  In making its recommendation, the Board concluded that the offer price is inadequate and does not reflect PeopleSoft's real value.  The Board received the opinions of Citigroup Global Markets Inc. and Goldman, Sachs & Co. that, as of November 10, 2004, the Oracle offer is inadequate from a financial point of view.

Solid third quarter 2004 performance:  For the third quarter, PeopleSoft announced license revenue of $161 million, record total revenue of $699 million (a 12% increase over the prior year), and strong earnings per share and cash flow, all of which substantially exceeded all estimates during a very challenging period.

Substantial sequential growth forecast for fourth quarter 2004:  PeopleSoft continues to demonstrate strong sales execution and entered the fourth quarter with a robust pipeline.  The Company anticipates substantial sequential growth in license revenue and pro forma and GAAP earnings per share.  Specifically, PeopleSoft anticipates that license revenue will be in the range of $175 million to $185 million with total revenue between $700 million and $715 million.  Operating margin for the quarter is expected to be in the range of 16% to 18% (pro forma) and 11% to 13% (GAAP).  The Company expects to report pro forma and GAAP earnings per share between $0.20 and $0.22 and between $0.14 and $0.16, respectively.  For the full year 2004, the Company expects total license revenue between $600 million and $610 million with record total revenue of approximately $2.7 billion.

Strong momentum reflected in guidance for 2005:  The Company expects strong momentum in 2005 due primarily to continued growth in license revenue; a growing maintenance revenue stream; focusing on operating efficiency and lowering costs; and the full year benefit of the cost and revenue synergies from the J.D. Edwards acquisition.  For 2005, the Company expects license revenue of $640 million to $655 million, an increase of 5% to 10% and total revenue of $2.8 billion to $2.9 billion, representing 4% to 8% growth.  The Company also anticipates pro forma operating margins for the year in excess of 20% and GAAP operating margins in excess of 16%.  2005 pro forma earnings per share are expected to be between $1.05 and $1.10 and GAAP earnings per share are expected to be in the range of $0.82 to $0.87.  Guidance for 2005 does not include any potential benefit from the elimination of the Oracle overhang.

J.D. Edwards acquisition continues to deliver value:  The Company has successfully executed on its integration with J.D. Edwards and will exceed the high end of the $207 million guidance in total synergies for 2004 given in September of last year.  The Company realized more than $190 million of these cost and revenue synergies through the end of the third quarter, 15% ahead of plan.  Customers continue to realize strong benefits from the integrated Enterprise One product family and the Company anticipates further efficiencies and revenue opportunities in 2005.

Well positioned for sustained growth in 2005 and beyond:  PeopleSoft’s plan reflects solid growth in its core ERP business, including areas such as Human Capital Management and Demand Driven Manufacturing, and from adjacent applications including Analytic Applications and Customer Relationship Management.  The Company is uniquely positioned to exploit additional opportunities in emerging markets such as on-demand applications and in countries with rapidly-growing manufacturing economies.  The Company will continue to focus on technology innovation leveraging web services and composite applications, and through its partnership with IBM will be delivering an industry-leading standards-based applications and infrastructure platform.

PeopleSoft is worth more now than in February 2004 when Oracle made its inadequate $26 offer.  Since the beginning of the year, PeopleSoft has:

·         Generated $422 million in license revenue, creating additional maintenance revenue and future up-sell and cross-sell opportunities

·         Added 418 new license customers

·         Increased total deferred maintenance by approximately 9%

·         Generated $248 million in incremental cash, or approximately $0.67 per share

Offer inadequate based on fundamental valuation measures:  Despite the strategic value of this transaction to Oracle, the offer price values the Company at multiples far below those paid in comparable transactions in the enterprise software industry.  Also, Oracle’s offer only values PeopleSoft at 22x forecasted 2005 earnings, well below PeopleSoft’s historical average trading multiple and the current average 2005 P/E multiple of other leading enterprise software companies.

Alameda lawsuit against Oracle seeking damages in excess of $1 billion goes to trial in January:  PeopleSoft claims compensatory damages of more than $1 billion plus punitive damages in the Company’s lawsuit against Oracle, which is scheduled to go to trial before a jury in Oakland, California, on January 10, 2005.  PeopleSoft’s complaint alleges that Oracle has engaged in unfair business practices, including a deliberate campaign to mislead PeopleSoft’s customers and disrupt its business.

The Board also noted that Oracle is misrepresenting facts in an attempt to stampede PeopleSoft stockholders into selling at an inadequate price:

·         An Oracle executive testified in Delaware that Oracle promoted a “stingy” offer and publicly called it generous.

·         Oracle continues to wrongly demean PeopleSoft’s financial performance and outlook.  In fact, it is Oracle’s applications business that appears “distressed.”  Its license revenue declined approximately 36% in its most recent quarter over the prior year to less than half of PeopleSoft’s license revenue in the third quarter.

·         The Company believes that Oracle has conducted a calculated and coordinated campaign – most recently through testimony of Oracle executives in the Delaware trial – to damage PeopleSoft, drive down its stock price, and diminish PeopleSoft shareholder value.

·         Specifically, two Oracle executives implied in their testimony in Delaware that Oracle was planning to lower its offer price for PeopleSoft.  Just two weeks later, Oracle did exactly the opposite.

·         Oracle has declared $24 to be its “best and final” offer.  This compares to Oracle’s previous “final” offer of $26 on February 4, 2004.

Mr. Battle noted, “We understand that our stockholders want maximum value for their shares – whether from PeopleSoft’s plan or from Oracle.  We recognize that stockholders may tender their shares to Oracle for a variety of reasons, including the limited time available for our stockholders to understand the strength of our business as reflected in our guidance for 2005 and our plan to advance PeopleSoft’s leadership in the marketplace.  The Board and management are confident that in the months leading to our annual meeting, our stockholders will recognize the value we are creating and will support our continued efforts to protect the interests of all PeopleSoft stockholders.”

Company to Host Conference Call

PeopleSoft will host a conference call today, November 10, 2004, at 2:45 PM PT / 5:45 PM ET to discuss this release.  Interested parties may participate by dialing 866-249-5224, passcode: PeopleSoft.  Please dial in at least ten minutes prior to the start of the call.  International callers may dial 303-205-0033, passcode: PeopleSoft.  In addition, a live audio-only web cast of the call will be made available in the Investor Relations section of the Company’s web site at www.peoplesoft.com.  A replay of the call will be made available for 48 hours following the call and will be accessible by dialing 800-405-2236, or for international callers, 303-590-3000, passcode: 11015021.

NEW YORK (Reuters) - Oracle Corp. (Nasdaq:ORCL - news) on Monday raised its hostile takeover offer for rival software company PeopleSoft Inc. (Nasdaq:PSFT - news) by 14 percent, to $8.8 billion, and for the first time set a deadline for acceptance of the bid.

Oracle said the sweetened bid -- $24 a share, a 15.6 percent premium over PeopleSoft's Friday closing stock price of $20.77 -- was its "best and final offer." Oracle's previous bid was $21 a share, or $7.7 billion.  PeopleSoft shares rose to $23 in pre-market trading.  Oracle said it would withdraw its bid unless a majority of PeopleSoft shares were tendered to it by Nov. 19.  "This is the first time that we made clear that we would withdraw the offer on the 19th," said Kenneth Glueck, a lawyer for Oracle.

The new offer, which follows last week's vote by the European Commission (news - web sites) to approve the Oracle bid for PeopleSoft, is conditioned on having a majority of PeopleSoft shares tendered and the elimination of PeopleSoft's "poison pill" takeover defense.  Oracle said it sweetened its bid with the hope that it would have a stronger case to overturn the poison pill in court.

PeopleSoft's poison pill would allow a large number of shares to be issued once a certain amount of shares in the company have been acquired. It also has a customer rebate program that could potentially raise the cost of a takeover by at least $2.4 billion.  If a majority of shares have not been tendered by midnight Nov. 19, the takeover offer will be withdrawn, Oracle said. It is the first time since the bid was launched in June 2003 that Oracle has set such a deadline.

If a majority of PeopleSoft's shares have been tendered but PeopleSoft's board has not removed the poison pill and Delaware law obstacles, Oracle said it will look to the Delaware Chancery Court to take appropriate action.  "We have asked the court in this case to remove the poison pill. That's a very high hurdle to get over," Glueck said. If Oracle gets at least 50 percent of PeopleSoft's shares by Nov. 19, "we will ask the vice chancellor to step in and remove the poison pill."

In a letter sent to the PeopleSoft board dated Oct. 31, Oracle said it intend to develop and introduce a next generation of PeopleSoft products, PeopleSoft 9, and intends to maintain an engineering organization at the company's Pleasanton, California, campus.  The plan is intended to dispel customer concerns that PeopleSoft products will not be supported once the company is acquired.  PeopleSoft has repeatedly said that Oracle launched the takeover bid in order to disrupt its business.

(Additional reporting by Edward Tobin)

EUROPE APPROVES ORACLE TAKEOVER OF PEOPLESOFT