PeopleSoft users welcome delays to Oracle bid

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PeopleSoft users welcome delays to Oracle bid

The US Department of Justice (DoJ) has requested additional information from Oracle of its hostile bid for PeopleSoft which, experts have warned, could drag out for months.

In addition, a hearing where Oracle had been expected to try and force PeopleSoft to stop its antitakeover efforts has been delayed until 25 July. That, according to PeopleSoft advocates, could allow PeopleSoft to close its friendly buyout of rival JD Edwards, which could further complicate Oracle's takeover plans.

JD Edwards chief executive officer and chairman Bob Dutkowsky noted that while the DoJ's request for information from Oracle does not directly affect his company's merger with PeopleSoft, it does, at least, slow Oracle's hostile bid.

"The way I suggest you look at it is that it creates a clear and wide-open pathway for JD Edwards and PeopleSoft to merge," he said.

The constantly evolving situation drew mixed reactions from users and analysts.

The DoJ's evaluation of Oracle's plans could go on for three or four months - or even longer, said Daniel Wall, a lawyer specialising in technology and antitrust issues. In the meantime, companies will have to make purchasing and upgrade decisions under a "cloud of uncertainty".

The delays do not make Oracle's job any easier, and should PeopleSoft and JD Edwards combine, "it is highly questionable that Oracle will continue to pursue a deal", said John Moore, an analyst at consulting firm ARC Advisory Group.

However, PeopleSoft users see the legal manoeuvres as a good thing.

"The longer these things stretch out, the more probability of failure [of Oracle's takeover bid], so this may be good news for those who want to see PeopleSoft remain independent," said Peg Nicholson, president of the independent PeopleSoft international customer advisory board. Ideally, Oracle will withdraw its bid and PeopleSoft and JD Edwards will finish their transaction, she said.

"I would think time is on PeopleSoft's side," said John Schindler, chief information officer at LD Kichler, a maker of electrical products which uses PeopleSoft ERP products.

If the JD Edwards deal is consummated, Oracle will have to raise its bid to between $9bn (£5.4bn) and $10bn, he said.

On the other side, Oracle business applications customers reaffirmed their desire to see the acquisition succeed.

"I still support the deal and am hopeful that this will deliver a better overall ERP-CRM solution based on the best a combined Oracle-PeopleSoft has to offer," said David Rudzinsky, chief information officer at medical instruments maker Hologic, which runs Oracle ERP and CRM software.

Marc L Songini writes for Computerworld


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