DOJ Passes on Appeal of Oracle Verdict

 
 
By John Pallatto  |  Posted 2004-10-01 Email Print this article Print
 
 
 
 
 
 
 

Updated: The U.S. Justice Department announced Friday that it would not appeal the recent U.S. District Court decision that Oracle Corp.s $7.7 billion hostile buyout bid for PeopleSoft Inc. didnt violate federal antitrust law. In early September, Judge Vaughn Walker cited issues with the Justice Departments depiction of the enterprise software market during the trial and denied the request for a federal injunction to block the Oracle deal.
"The evidence, including the testimony of numerous customers, strongly supported our case against this proposed, transaction, said R. Hewitt Pate, assistant attorney general in charge of the Justice Departments Antitrust Division, in a prepared statement.
However, respecting "the role of the courts in the Unites States merger review process," the justice department decided not to file an appeal, Pate continued.
Click here to read about how Judge Vaughn Walker closely questioned Oracle and government attorneys during the closing arguments in the Oracle antitrust trial.

Pate suggested that an appeal would not likely succeed in the face of the factual findings in the decision Judge Walker released in Sept. "While we disagree with some of the legal observations in the district courts opinion, the ultimate outcome rests on detailed factual findings that would appropriately receive great deference in the appellate process," he said. Oracle Corp. Chairman Jeffrey Henley said the Justice Departments decision allows his company to focus on the next stage in its prolonged legal battle to buyout PeopleSoft. "This affirms our longstanding belief that the transaction is not anti-competitive," Henley said in a prepared statement. "We are now looking forward to the trial in Delaware of our claims against the PeopleSoft board of directors for their actions over the past year, which have seriously damaged and continue to damage shareholder value.

PeopleSoft on Friday said in a statement that its board of directors "will meet in due course to review the implications" of the DOJs decision. However, the company noted that the board is standing buy it decision to reject Oracles $21 per share buyout offer.

The company has a obtained opinions from Citigroup Global Markets Inc. and Goldman, Sachs & Co that the $7.7 billion offer was "inadequate from a financial point of view," PeopleSoft officials said.

PeopleSoft is has filed its own lawsuit against Oracle, seeking more than $1 billion in compensatory damages plus punitive damages claiming that Oracle has engaged in unfair business practices to "mislead PeopleSofts customers and disrupt its business." This case it scheduled to go to a jury trial in Oakland, Calif. in January.

In addition, Oracle is suing in Delaware Chancery Court to force PeopleSoft to remove the "poison pill" that would flood the market with additional shares of PeopleSoft stock if Oracle succeeds in acquiring a certain percentage of the companys stock. The trial is scheduled to start on Monday. Meanwhile, the outlook for a settlement by PeopleSoft changed on Friday as PeopleSofts board of directors fired CEO Craig Conway. The board cited "a loss of confidence" in Conways ability to guide the company. Editors Note: This story was updated to include information and comments from a PeopleSoft statement. Check out eWEEK.coms Enterprise Applications Center at http://enterpriseapps.eweek.com for the latest news, reviews and analysis about productivity and business solutions.

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John Pallatto John Pallatto is eWEEK.com's Managing Editor News/West Coast. He directs eWEEK's news coverage in Silicon Valley and throughout the West Coast region. He has more than 35 years of experience as a professional journalist, which began as a report with the Hartford Courant daily newspaper in Connecticut. He was also a member of the founding staff of PC Week in March 1984. Pallatto was PC Week's West Coast bureau chief, a senior editor at Ziff Davis' Internet Computing magazine and the West Coast bureau chief at Internet World magazine.
 
 
 
 
 
 
 

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