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Oracle Still Lusts after PeopleSoft

Oracle Still Lusts after PeopleSoft

Oracle staged a conference call Monday to clear up "misconceptions in the market" and to say that it hadn't been dissuaded from the PeopleSoft acquisition by the length of time the process was taking but that it wasn't going to pay any unreasonable price for the joint either. Oracle made its hostile bid in June since then PeopleSoft stock has risen above Oracle's offer of $19.50 a share.

Oracle said it was sure once the Justice Department and European Commission had all the information and had mulled it all over that the regulators would give Oracle the green light.

It also said that it serious doubts about of how PeopleSoft is being governed.

Oracle claimed that it had been advised by experts that PeopleSoft couldn't legally book the revenues from contracts that were cut because of PeopleSoft's offer to refund the money anywhere from two to five times over if Oracle buys the company, which, if true, PeopleSoft would find altogether distressing.

Oracle played the refund promise as proof of "management entrenchment" and observed that PeopleSoft has "backtracked" on what would trigger the refund several times, suggesting a certain flightiness.

Among other things, PeopleSoft last week extended the rebate plan until the end of the year.

Oracle and others accuse PeopleSoft of artificially inflating its revenue numbers thanks to this refund scheme. PeopleSoft has also refused to break out the numbers for its recent JD Edwards acquisition, raising suspicions of weakness.

Oracle repeated a remark it's made before about how PeopleSoft experienced a double-digit revenue decline for seven quarters.

Oracle's fallback scheme for acquiring PeopleSoft is to replace PeopleSoft's board next spring. To do that, it has to come up with a slate of proposed directors now, it said. It will seek all four seats that will come up for re-election. It'll come up with some names before the regulators approve the takeover.

Oracle described any acquisition of PeopleSoft as a "medium to small transaction" given Oracle's $65 billion market cap and continued to claim that it would be good for competition and customers alike. Its promise to support PeopleSoft software for the next 10 years was "unprecedented," it said, something even PeopleSoft hasn't vowed.

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Maureen O'Gara the most read technology reporter for the past 20 years, is the Cloud Computing and Virtualization News Desk editor of SYS-CON Media. She is the publisher of famous "Billygrams" and the editor-in-chief of "Client/Server News" for more than a decade. One of the most respected technology reporters in the business, Maureen can be reached by email at maureen(at)sys-con.com or paperboy(at)g2news.com, and by phone at 516 759-7025. Twitter: @MaureenOGara

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