Investment banker representing oracle

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In 2003, the management of PeopleSoft, Inc., a company that provided human resource management systems, was concerned about a takeover by Oracle, a company specializing in database management systems. it took the unusual step of guaranteeing to its customers that, if it were acquired within two years and product support was reduced within four years, its customers would receive a refund of between two and five times the fees paid for their software licenses. The hypothetical cost to Oracle was estimated at $1.5 billion. The guarantee was opposed by PeopleSoft's shareholders.(It appears to be not in their intetests.) PeopleSoft discontinued the guarantee in April 2004. Oracle did succeed in acquiring PeopleSoft in December 2004. Although some jobs at PeopleSoft were eliminated, Oracle maintained at least 90% of PeopleSoft's product development and support staff.

a) What are the most likely reasons PeopleSoft Inc concerned above the takeover.

b) What are the other options are available to PeopleSoft Inc to avoid this takeover and justify them in relation to the case above.

c) Suppose you are the Investment Banker representing Oracle, you have been approached by the Investment Banker representing PeopleSoft he is tasking you to explain and justify how you come up with the estimated at $1,5 billion price tag. Draft up a report detailing your procedure with justifications.

Reference no: EM132535378

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