Oracle has increased its unsolicited offer to buy rival PeopleSoft from $5.1bn to approximately $6.3bn (£3.8bn), while at the same time announcing that it was filing suit against PeopleSoft, its board of directors and JD Edwards for their efforts to stave off the acquisition.
"Oracle remains committed to acquiring PeopleSoft and will not be deterred by management's manoeuvers to maintain control of a company they do not own," Oracle chairman and chief executive officer Larry Ellison said.
Oracle said that it was filing the suit in response to PeopleSoft and JD Edwards' "collective efforts to eliminate PeopleSoft shareholders' ability to accept Oracle's tender offer".
Using "poison pill" provisions of its shareholder rights plan to increase the cost of the acquisition, PeopleSoft can thwart Oracle's takeover attempt, even if Oracle is able to win over the majority of PeopleSoft shareholders.
Oracle chief financial officer Jeff Henley called repeatedly on PeopleSoft management to revoke the poison pill, even providing a free phone number for PeopleSoft shareholders to contact the company and urge its management to consider the Oracle offer.
"We're suing them, but we're also urging all [PeopleSoft] shareholders to get [management] to face reality that they need to get rid of this pill," Henley said.
Oracle executive vice-president Chuck Phillips echoed Henley's statements, saying that PeopleSoft's management abandoned its fiduciary responsibility to the company's shareholders by blocking them from considering Oracle's offer.
Oracle also claimed to have spoken with holders of a majority of PeopleSoft shares and said they have indicated prices for which they would tender their shares. As a result, Oracle is increasing its all-cash offer to $19.50 per share, or approximately $6.3bn.
The Oracle offer was a "great value" for PeopleSoft shareholders, given the company's recent declines in revenue, and represented a premium over PeopleSoft's fair market price for much of the past year, Henley said.
Oracle hoped its increased offer would expedite the acquisition of PeopleSoft, he said.
Henley said that the company expected a majority of PeopleSoft shareholders to contact the board immediately and "demand the opportunity to accept the offer".
Those shareholders recognise the need for consolidation in the applications industry and the benefit of the PeopleSoft-Oracle merger in fending off competition from SAP and Microsoft.
Oracle announced 6 June that it was making its initial $5.1bn bid to buy PeopleSoft, just days after the enterprise software provider announced it was acquiring JD Edwards.
Both PeopleSoft and JD Edwards have revolted against the takeover, and each company filed suits against Oracle last week claiming unfair business practices and interference with customer relationships.
Scarlett Pruitt and Paul Roberts write for IDG News Service