Justice pumps Oracle for more info

The Justice Department notified Oracle Corp. on June 30 that federal officials would like to take a deeper look at the company's proposed takeover of PeopleSoft Inc.

This second request for information could significantly slow what had been fast-paced jockeying by both companies to appeal to federal regulators and customers. PeopleSoft has launched a publicity campaign saying any takeover would harm existing PeopleSoft customers and leave them out in the cold as Oracle would cease making, selling and supporting PeopleSoft products.

Oracle countered that claim, calling PeopleSoft's assertions "lies and scare tactics."

On June 6, Oracle announced it was making a hostile takeover bid for PeopleSoft, a bid that was rejected by the PeopleSoft board of directors. That bid, for $5.1 billion, was almost immediately trumped when Oracle raised the offer to about $6.3 billion.

Oracle chief executive officer Larry Ellison said in a statement that the offer increase came after Oracle spoke to PeopleSoft's major shareholders.

"Many of those shareholders indicated the prices at which they would tender their shares," he said. "Oracle remains committed to acquiring PeopleSoft and will not be deterred by management's maneuvers to maintain control of a company they do not own."

Federal antitrust regulators contacted Oracle and PeopleSoft and asked for more information to determine whether the takeover would violate antitrust laws. The Justice Department has asked both companies to give their respective view of the enterprise software market and will make a judgment based on that.

Jim Finn, a spokesman for Oracle, said the federal regulators' request for more information June 30 didn't come as a surprise to the company.

"We were not surprised given the size and scope of the transaction and the fact that PeopleSoft is also proposing its own transaction, which is undergoing regulatory review," Finn said in a statement. "It is important not to confuse process with outcome."

Days before Oracle made its announced bid for PeopleSoft, PeopleSoft announced its intent to purchase J.D. Edwards and Co., which is also under Justice Department review.

On June 30, Oracle shares fell 42 cents to close at $12.01 while PeopleSoft fell 12 cents to $17.56. Oracle announced the Justice Department's request for more information after the stock market closed.


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