Pleasanton woos Oracle to keep operations here Pleasanton woos Oracle to keep operations here (December 17, 2004)

PeopleSoft takeover seen as threat to 3,500 local employees
by Jeb Bing

Pleasanton city officials planned to send a letter late this week to Oracle Corp. founder and chief executive Larry Ellison and his management team congratulating them on their acquisition of PeopleSoft Corp., a $10.3-billion purchase that ended 18 months of verbal and legal skirmishes over the unsolicited takeover.

But the letter, signed by Mayor Jennifer Hosterman and City Manager Nelson Fialho, could reach Oracle at the same time its co-president Charles Phillips is already here. With his management team, Phillips is looking at what to do with PeopleSoft's coveted business applications software and systems and the company's 11,255 employees, including 3,500 who work at its Pleasanton campus and more than 800 who live in this city.

Phillips said Tuesday, a day after the merger agreement was announced, that he hoped to close the deal within two weeks and to start the reorganization process immediately.

"Operationally, we think we will hit the ground running in January; the new organization will be in place by then," he said in a telephone news conference.

Fialho said he hopes that the new organization will include much of Pleasanton-based PeopleSoft, and he's willing to help in the transition as needed.

"I'd be happy to host Larry Ellison in town and take him to lunch" Fialho said. "I'll even pay for it."

The conciliatory letter from city officials follows one sent a few months ago at the direction of the City Council that congratulated PeopleSoft founder David Duffield on his re-appointment as the embattled company's chief executive and wishing him well in his efforts to keep PeopleSoft afloat.

Duffield, well known in local and regional civic and business circles, started the company in 1987 in Walnut Creek and later moved it to Hacienda Business Park in Pleasanton. He retired in 1999 to devote more time to his favorite charity, the Pet Rescue Foundation known as Maggie's Fund, a $240 million Duffield family foundation that supports animal shelters and rescue groups across the country.

Duffield was succeeded by Craig Conway, who was fired as PeopleSoft's CEO in October by a corporate board that saw his feud with Oracle's Ellison as "too personal and aggressive." Some on the board and many employees saw Duffield's re-appointment as a white knight coming to save their company and jobs. In fact, according to one insider report, Duffield told employees that he was "adamantly opposed to Oracle's hostile bid." But after Oracle raised its bid to $26.50 a share, more than $6 over PeopleSoft's September stock price, Duffield and the board, along with a majority of shareholders, accepted Oracle's offer.

As Phillips develops a business plan for absorbing PeopleSoft, Pleasanton civic, city and business leaders are using their own influence to make sure the city's largest employer stays here.

"We're hoping Oracle will use our existing infrastructure, its buildings and services, and maintain a strong presence in Pleasanton," Fialho said. "We believe this is a strong and good location for business, based on our transportation systems and a skilled and highly educated workforce."

"I would imagine that Redwood Shores where Oracle is located is not the cheapest place for housing, which is why so many companies have moved here," Fialho added. "Our housing is less expensive and it's even more so over the Altamont and into Tracy where many company employees live. That's what makes our Pleasanton location and Hacienda Business Park an ideal place for business."

James Paxson, General Manager of Hacienda Business Park Owners Association, said the business park and PeopleSoft employees are in "a wait and see mode."

"We have not been presented with any plans or particular aspects of Oracle's programs for this site," he added. "Certainly PeopleSoft has been a tremendous and terrific investor in the park and a great employer to work with. I'm hoping that Oracle, in acquiring PeopleSoft, will preserve and continue that good relationship. We'll play the hand that's dealt to us."

Paxson noted that Oracle had sought to buy 40 acres in Dublin in 2000 to expand its operations but backed away in the economic downturn that year.

"We're hopeful that the fact that they were interested in the Tri-Valley as recently as four years ago is a good sign that perhaps they will make the facilities they have just acquired in Hacienda and Pleasanton a part of their future."

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