Software giant Oracle, in a surprise move that shook up the tech sector, announced a 5.1 billion-dollar hostile takeover offer for business software maker PeopleSoft.
"The acquisition of PeopleSoft will immediately make Oracle an even more profitable and competitive company," Oracle chairman and chief executive Larry Ellison said Friday.
The bid of 16 dollars a share was a six percent premium to PeopleSoft"s recent closing price, but the move sent PeopleSoft soaring 21 percent, up 3.20 to 18.31.
Oracle, which calls itself "the world"s largest enterprise software company," specializes in software for the Internet and e-commerce, as opposed to rival Microsoft, which is stronger in consumer software.
Jeff Henley, Oracle executive vice president, said, "Given PeopleSoft"s current prospects and plans, we believe our offer presents compelling value to PeopleSoft shareholders. In addition, we expect that the acquisition of PeopleSoft will increase Oracle"s earnings per share from the first combined quarter."
Henley added, "We expect there to be substantial cost savings and minimal business integration risk."