Looking to put additional pressure on Oracle Corp. to halt its hostile takeover bid of enterprise software rival PeopleSoft Inc., Connecticut Attorney General Richard Blumenthal has contacted every state in the union asking them to join a class action suit against Oracle, according to Blumenthals press office.
Several states have expressed interest, including Texas and California, though none has officially joined the suit.
Texas Attorney General Greg Abbot said in a statement that “our office has not taken any legal action to block the proposed takeover, but we are watching the developments closely. We take great interest anytime a situation threatens competition and puts the customer, whether an individual or government entity, in jeopardy of paying higher prices for a particular product.”
A spokesman for Abbot said an earlier report from the Wall Street Journal stating that Texas had indeed joined Connecticuts suit is incorrect.
A spokesman for California Attorney General Bill Lockyer told eWEEK, “We have no plans to intervene at this point, but we are monitoring developments.”
The attorneys general are holding a conference call today to discuss the issue.
On June 18 Connecticuts Blumenthal, along with Governor John Rowland and state Comptroller Nancy Wyman, filed an antitrust lawsuit against Oracle, of Redwood Shores, Calif., to block its hostile takeover bid of PeopleSoft, which is based in Pleasanton, Calif. The lawsuit alleges that the acquisition of PeopleSoft by Oracle would violate state and federal antitrust laws, directly damage the state and its economy, and raise prices for businesses, governments and consumers by significantly reducing competition in the markets.
Oracle, for its part, released a statement today reaffirming its resolve to acquire PeopleSoft.
In Oracles original takeover bid there was a condition that PeopleSoft and J.D. Edwards & Co (in the midst of being acquired by PeopleSoft) not amend the conditions of their merger, announced in early June. In mid-June, PeopleSoft made amendments to the merger designed to allow the two companies to speed up the transaction.
Today, Oracle waived its initial amendment condition and will file its own amendment with the SEC this afternoon. The move is designed to bring PeopleSofts board of directors to the negotiating table, Oracle officials.
Oracle spokesman Jim Finn said in a statement that Oracle still consider the amended agreement an “unlawful device” since it deprives PeopleSoft shareholders of their voting rights with regard to the J.D. Edwards merger.
“The condition we have now waived was identified by the PeopleSoft board of directors as an important reason in declining to pursue discussions with us,” said Finn. “We hope that with this waiver, PeopleSoft will finally agree to meet with us, as their shareholders are demanding.”
However, PeopleSoft spokesman Steve Swasey said Oracle is “just blowing smoke again.”
“Removing the waiver means nothing when Oracle still has litigation pending against the PeopleSoft-J.D. Edwards merger in Delaware,” Swasey said.
Oracle filed suit against PeopleSoft, its board and J.D. Edwards in the Delaware Court of Chancery last Wednesday, alleging that their amended merger agreement was a breach of their fiduciary duties to shareholders since it could derail Oracles bid for PeopleSoft.
Swasey declined to comment on if or when PeopleSofts board would meet with Oracle. He compared Oracles latest maneuver to the “backpedaling” he said Oracle has done on whether or not it would continue to support and develop PeopleSoft applications post-acquisition.
“Theres been a pattern of this,” said Swasey. “Its just another example of Oracle blowing smoke.”
Finn could not immediately be reached for comment on whether Oracle would drop its lawsuit against PeopleSoft and J.D. Edwards.