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