In a sign that it has made its final offer for
PeopleSoft, Oracle has said it will drop its lawsuit against the
company if PeopleSoft's shareholders reject the offer.
Oracle has extended its hostile takeover bid for PeopleSoft more
than a dozen times since June 2003. But earlier this month, it
raised its cash offer to shareholders and said the offer would
lapse if a majority of PeopleSoft's shares were not in its hands by
the end of next week.
Oracle has asked the US courts to void PeopleSoft's "poison
pill", a clause in its corporate regulations that allows PeopleSoft
to dilute its shares and block a hostile takeover. Oracle has also
asked the courts to stop PeopleSoft adding a clause to some
customer contracts offering substantial damages payments if
PeopleSoft should be acquired by another company that disrupts its
development and support plans.
If PeopleSoft shareholders accept Oracle's offer, Oracle said it
would continue to press its lawsuit to strip the poison pill from
the PeopleSoft corporate rulebook. If the courts declined to do so,
Oracle's next option would be to replace some PeopleSoft's
directors at the company's next shareholder meeting.
Whatever happens, the two companies appear likely to remain
locked in acrimonious legal wrangling for years to come. A trial is
scheduled to start next year over PeopleSoft's allegations that
Oracle employed unfair tactics and committed libel in its takeover
bid. PeopleSoft spokesman Steve Swasey said that even if Oracle
withdrew its bid, PeopleSoft would pursue the case.
Stacy Cowley writes for IDG News Service