Oracle Sets New PeopleSoft Buyout Deadline

Oracle extended its $7.7 billion tender offer for all outstanding shares of PeopleSoft yet again on Thursday, as it waits for U.S. District Court Judge Vaughn Walker to issue a decision in an antitrust lawsuit that aims to permanently block the buyout.

The offer of $21 per share is now scheduled to expire at midnight Sept. 10. Oracle Corp. has continued to extend the offer every one to two months since it first announced its bid for PeopleSoft Inc. in June 2003.

Testimony and final arguments in the antitrust trial were completed in mid-July. There has been no indication of when Walker will release his ruling in the case. Some court observers have suggested that it could be mid-September before the judge writes his decision after sifting through thousands of pages of testimony and trial exhibits.

The Department of Justice has argued that the court should block the merger on the grounds that only Oracle, PeopleSoft and SAP AG compete for sales of high-function enterprise software to enterprise customers.

PeopleSoft customers would be harmed by the merger because they would be pressured by Oracle to replace their PeopleSoft installations with Oracle products, government lawyers argued.

/zimages/1/28571.gifClick hereto read about how Judge Walker challenged DOJ and Oracle lawyers to clarify key questions as they presented their final arguments.

Oracles lawyers have argued that there are a significant number of midrange competitors in the ERP (enterprise resource planning) software market that would ensure substantial competition in the market after an Oracle merger. Furthermore, they have argued that it wouldnt be in Oracles interest to alienate PeopleSoft customers by pressuring them to make an untimely upgrade to Oracle products.

The buyout bid will likely remain on the table even after Walker enters his decision until the parties have exhausted their appeals.

As of the close of business Thursday, PeopleSoft shareholders had tendered about 21.6 million shares and had not withdrawn them, according to Oracle officials. At the end of the previous tender-offer deadline, only 4.6 million shares had been tendered and not withdrawn. PeopleSoft stock closed Thursday at $17.25, down eight cents from the previous days close.

The number of shares offered has fluctuated greatly over the past 14 months, apparently depending upon shareholder sentiment about whether Oracle will ultimately prevail in the antitrust lawsuit.

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