UPDATED: Oracle nixes rumors that it would rescind its takeover bid for PeopleSoft and files motion to counter rival's assurance program.
Quashing online rumors, Oracle Corp said Tuesday the company has no intention of stepping back from its $7.3 billion hostile takeover bid for PeopleSoft Inc.
Despite an amended filing on Monday that requested the Delaware Chancery Court to provide injunctive relief against PeopleSofts Customer Assurance Programwhich could be prohibitively costly to Oracle should it acquire rival PeopleSoftOracle said it is still moving forward with the deal.
Oracle, of Redwood Shores, Calif., originally filed suit against PeopleSoft earlier this summer in an attempt to have the company remove its so-called Poison Pill anti-takeover stipulation.
The amended suit looks to force PeopleSoft to not only dismantle its Poison Pill, but to end its "unprecedented rebate program." The company also filed a separate request to the court this week requesting an expedited decision, signaling perhaps the next move in the battle, which would be a decision from the Department of Justice regarding the competitive nature of the acquisition.
PeopleSoft initially enacted its Customer Assurance Program in June, after Oracles CEO Larry Ellison was quoted as saying he would discontinue support of PeopleSofts software should the acquisition prove successful.
In October PeopleSoft, of Pleasanton, Calif., modified that program to include refunds for customers between two and five times the total arrangement feeslanguage that could, in the end, include such expensive line items as implementation, integration and consulting fees.
The upgraded program also stipulates refunds will be granted if PeopleSoft is acquired within two yearsversus one year in the original offerand the acquiring company reduces support for PeopleSofts software within four years, versus two years in the initial program.
While PeopleSoft officials contend that the assurance program is of no consequence to Oraclein the event that its successful in its acquisition attemptsbecause Oracle has already said it would maintain support of PeopleSofts product line.
"An acquirer would not have to make any payments to any customers if they continue the level of support that is generated from PeopleSoft," said Steve Swasey, PeopleSoft spokesman. "So if PeopleSoft is acquired by Oracle, they would never have to pay a penny if they continue to support [PeopleSofts software development and support]."
Oracle, for its part, contends the program is hitting PeopleSofts bottom line.
"PeopleSoft management entrenchment tactics continue to destroy the value of the company for its shareholders," said Deborah Lilienthal, an Oracle spokeswoman. "We remain committed to the transaction."
In the meanwhile, some PeopleSoft shareholders are taking umbrage at the upgraded assurance program, filing a separate suit in the same Delaware court late last week. That suit is an effort to force PeopleSoft to cease the customer assurance program, saying its draconian in its effect.
PeopleSoft, for its part, has ongoing litigation against Oracle in a suit that would force Oracle to drop its acquisition bid. The next hearing date for that case, filed in the Alameda County, Calif. Court, is December 5.
A court date in Oracles case against PeopleSoft is unavailable at this time, according to the Chancery Court.Discuss This in the eWEEK Forum
Editors note: This story has been updated since its original posting to include information from Oracle.