March 27, 1997 1:30 PM ET
Oracle's Ellison does the Apple tease--again
By Margaret Kane

  Does he mean it this time?

Oracle Corp. CEO Larry Ellison has again fired up the rumor mill concerning the future of Apple Computer Inc. This time Ellison has told a California newspaper that he is putting together an investment group and intends to decide over the next few weeks whether to buy Apple.

Ellison, who is good friends with Apple co-founder and consultant Steve Jobs, said he would dismiss Apple CEO Gil Amelio, according to the San Jose Mercury News. The newspaper also quoted Ellison saying that he and Jobs would be members of a new board, but that Jobs would not be involved in the potential deal.

In an interview with the paper, Ellison said he would approach the deal--should it occur--as a private investor and that it would not involve Oracle.

Wall Street watchers, who have sat through years of rumors about Apple's fate, treated the latest news with arm's length interest.

"I'm tired of commenting on rumors. My file cabinet of Apple rumors has fallen over," said Andy Neff, senior managing director at Bear Stearns & Co., in New York.

But the news did push Apple's stock up $1 at one point in morning trading.

Officials at Oracle and Apple were not immediately available for comment.

Analysts questioned whether Ellison would be more successful than other high-powered executives at trying to turn Apple around.

"It's not a management issue," said Jim Poyner senior vice president at Oppenheimer & Co., in New York. "One can criticize current management for not being as creative as people hoped they would be in the first year. But it's just a technical issue unless you, as a buyer, have something radically different up your sleeve."

Ellison did not divulge specifics to the newspaper other than to say he would fire Amelio. If Ellison is indeed mulling a takeover of Apple, analysts questioned the strategic sense of making that news public.

"It would obviously be unfriendly, and it's a strange way to do an unfriendly deal," said Barry Bosak, an analyst at Smith Barney, Harris Upham & Co., in New York. "Usually, somebody just goes ahead and does something, and if they have any discussion, they're usually in private. It's very unusual to wage preliminary bids in a newspaper."

Besides putting Apple, and Amelio, on notice, today's news has also raised the company's stock price, not something a potential buyer normally wants to see.

The bump in the stock today raised the price for 60 percent of the outstanding shares to $1.32 billion from $1.25 billion. Ellison is quoted as saying he would buy 60 percent of the shares in cash.

And about two percent of those shares are owned by Apple board member A.C. Markkula, who Ellison said had "destroyed" what Jobs built up, according to the Mercury News. According to Apple's Dec. 27 proxy statement, Markkula is the single largest shareholder on Apple's board of directors.

In January 1996, Sun Microsystems Inc. was rumored to have offered about $23 a share for the company. Markkula, the dominant member of the board, was said to have led the negotiations with Sun.

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