Apple chief executive Gil Amelio is ready to use a poison pill stock option to prevent Oracle boss Larry Ellison from mounting a hostile $1.25 billion takeover of the troubled PC company.
Ellison last week revealed that he is assembling a group of investors to buy Apple and force out Amelio and his management team. ?Now is the time,? said Ellison. ?I think Apple can be saved and I think Apple should be saved.?
As he prepared for a crucial meeting with one of Apple?s biggest institutional shareholders, Amelio said he refused to be distracted by Ellison?s threats. ?I will not get into a mode of reacting to Larry Ellison,? he insisted.
But the company?s lawyers are on red alert to fend off any hostile moves by using a poison pill option of offering new shares to existing shareholders at half the market price in order to dilute the stock.
Ellison wants to acquire 60% of Apple?s outstanding 124.7 million shares, but only if shareholders agree to sell at the current market value. If successful, he promises to sack Amelio and the current management team.
He would take a seat on the board of directors, but would not run the company. A major role would also be given to Steve Jobs, the ousted Apple founder who returned to the company in December as a special advisor to Amelio. Jobs, who describes Ellison as his ?best friend?, was playing dumb last week. ?This is a stupid little soap opera and I don?t have a clue about it,? he said.
On Tuesday, Amelio met representatives of the California Public Employees Retirement System (CalPERS) which controls 709,000 Apple shares and which is fiercely critical of Amelio?s management. It calls Apple the single worst stock in corporate America. A CalPERS spokesman said the fund was ?intrigued? by Ellison?s plan. The fund voted against the Apple board at the company?s AGM in February.
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