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How to Tender PeopleSoft Shares to Oracle
What does it mean to "tender" shares to Oracle?
To vote FOR the acquistion PeopleSoft shareholders must offer ("tender") their shares to a depositary before midnight on Friday, July 18, 2003. At that time the tendered shares will be counted and if more than 50% have been tendered, and other contingencies of the offer have been met, then Oracle will exchange each share of PeopleSoft stock for $19.50 in cash.
Brokers have provided instructions to sharesholders for tendering your shares. If you want to tender shares and have not received instructions contact your stock broker immediately. If you hold certificates contact the transfer agent for instructions.
There is no purpose served by tendering only a portion of your shares. You do not have the option to receive cash for only a portion of your shares.
80% of PeopleSoft shares are owned by institutional investors. 10% is held by founders, principals and other insiders. Only 10% is held by individual investors.
The shares will be replaced by cash in your brokerage account shortly after July 18th and the exchange will be recognized for tax purposes as a sale.
The stock market reflects the aggregated opinion of interested parties. And the current market price of $17.80 indicates that the parties do not think the deal is going to happen at $19.50.
One of the highest hurdles is the "Poison Pill" provision. The offer is contingent on the removal of this Preferred Stock Rights provision, which is unlikely to occur before July 18th.
What are the implications for employees with stock options?
PeopleSoft's Stock Option Plan has a provision for an acquiring company to assume the existing plan or substitute with an equivalent option. If not assumed or substituted, options vest immediately and become exercisable for fifteen days.
If Oracle acquires Peoplesoft and then terminates employees they would have no responsibility to immediately vest options.
You can NOT tender stock options. You would have to exercise the options and then tender the stock.
