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By Margaret Kane, 17 June 2003 07:53

NEWS PeopleSoft has come up with some cash to sweeten its bid for JD Edwards, speed up the deal and fend off Oracle's unwanted bid. The new bid will be slightly higher, up $50m to $1.75bn, speed up the integration of the two companies and boost savings to $150m-$220m per year, claims PeopleSoft. It will also mean that PeopleSoft can avoid putting the deal to a vote by its shareholders – as Oracle was quick to point out. PeopleSoft and JD Edwards are keen to produce a done deal to end the uncertainty for their customers and keep their businesses rolling. The amended plan calls for PeopleSoft to pay $863 million in cash and issue 52.6 million shares of its stock in exchange for J.D. Edwards. J.D. Edwards shareholders will get $7.05 plus 0.42 of a PeopleSoft common share for each J.D. Edwards share. The shareholders will also have the option of taking the original stock deal. The original terms between the two business software makers called for J.D. Edwards shareholders to get 0.86 of a PeopleSoft share for each J.D. Edwards share. By offering a combination of cash and stock, the new deal removes some of the diluting effect the initial deal had on PeopleSoft shares. That's because by paying cash, the company must issue fewer new shares, meaning the deal will have less of an effect on earnings per share. However, in a statement late yesterday, Oracle claimed that by changing the terms of the deal PeopleSoft was trying to eliminate the need for its shareholders to approve the J.D. Edwards acquisition. "PeopleSoft is doing everything it can to prevent its shareholders from voting," CEO Larry Ellison said in the statement. "If PeopleSoft's board is so convinced that the J.D. Edwards acquisition is a great deal, why won't it let their shareholders vote on it?" Responding to Ellison's remarks, PeopleSoft spokesman Steve Swasey said that while the revised deal no longer requires PeopleSoft shareholder approval, that was not the reason for altering the deal. "We changed it to protect our shareholders and to provide more certainty to our customers," he said. Margaret Kane writes for news.com