Time to get hostile
Oracle is at it again. In early March, just weeks after concluding its takeover of PeopleSoft, one of the most acrimonious, and at times personal, hostile takeovers in years, the enterprise software company jumped back on the hostile acquisition trail.
This time Retek, a retail-software provider, was its target. The battle was over by the end of March. Oracle beat SAP, which made its initial, accepted bid for Retek at the end of February.
It's Oracle's actions in both cases that have got bankers wondering whether hostile takeovers, one of the great taboos of technology M&A in the 1990s, is about to be swept away. "In general I think that companies and investors are realizing that the technology sector is not some fragile organism that can't stand up to some bruising in a hostile takeover," says Seth Ferguson, joint global head of technology M&A for UBS. That's not to say that unsolicited offers were never made, but, says Ferguson, "within two or three days they would almost always become agreed bids".
Hostile bids were regarded as fundamentally misplaced in the sector, in large part because the way people were employed provided a natural poison pill, explains Don Hubbard, head of investment banking at San Francisco boutique investment bank Merriman Curhan Ford: "It was very easy in the 1990s to walk out the door of one technology company and find employment with another that would hand you some cash compensation and a significant number of options.