But that was exactly what PeopleSoft Inc. board member Steven Goldby did Tuesday when he was called to testify in the Delaware Chancery Court, where Oracle Corp. is suing to try to force the removal of PeopleSofts poison-pill provisions.
Goldby told the court that PeopleSoft is now willing to discuss an Oracle buyout for the right price and if there were "a high certainty" that the deal would close promptly. This raises the prospect that negotiations could go on between the two companies even as testimony continues in the trial. Talks may have already started.
If both sides agree to an indefinite trial recess, that will be a clear signal that the talks are getting downright amicable. Neither side will continue wasting money and time on a trial thats going to become moot through a buyout deal.
But Goldbys statement in itself does not mean that PeopleSoft is ready to abjectly surrender to Oracles 16-month pursuit. No PeopleSoft officer or board member can say the company will never consider any Oracle offer under any circumstances. They have a legal responsibility to shareholders to consider any bonafide purchase offer.
What it means is that the ball is back in Oracles court. Besides coming up with an offer that PeopleSoft is willing to consider, Oracle also has to show that it is serious about wrapping up the deal expeditiously so customers will know whether their investment in PeopleSoft applications has any long-term value. The legal maneuvering could go on for months to come.
If Oracle doesnt engage promptly in serious negotiations with an eye to an early deal closing, PeopleSoft can claim that it was right all along: Oracle only made the bid to disrupt its business and to discourage customers from buying PeopleSoft applications.
But PeopleSoft may be running out of options at this point. Other testimony from Goldby revealed that the board decided to fire CEO Craig Conway because it was dismayed by his display of "situational ethics" when he made misleading statements to analysts that the Oracles hostile-buyout bid wouldnt cut into sales, when the company already knew that it would.
Those statements could result in SEC (Securities and Exchange Commission) discipline or shareholder lawsuits on the grounds that Conway was deliberately deceiving the market. The board became particularly troubled when Conway acknowledged in a videotaped deposition that he made the statement to downplay the potential damage to PeopleSoft sales.
But more than sales have been damaged. PeopleSofts credibility in the market has also been tarnished by this testimony. The successive blows that the companys prospects have suffered over the past month now make it doubtful that PeopleSoft will have much choice but to accept Oracles best offer.
First, it was the federal court ruling that Oracles buyout bid would not violate antitrust law. Then, it was the muddled announcement about an IBM deal in which Conway apparently overstated the deals value, which gave rise to speculation that its new partner might even stand as a buyout alternative to Oracle.
Now, PeopleSoft is dealing with Conways firing and testimony about his questionable integrity. None of this is going to help convince PeopleSoft customers that this is a good time to purchase the companys products. And in the end, healthy sales and revenue are the only factor that can possibly sustain PeopleSofts market independence.
With some Wall Street analysts suggesting that PeopleSoft is looking pricey at $21 per share, PeopleSofts board may now find that this is yet another reason why its bargaining position is not the strongest.
The company cant wait for another quarter or two with glimmering hopes that sales show a robust recovery. As bitter a pill as it is, PeopleSoft may have no choice but to take Oracles offer while it lasts.