Another Wrench in Oracle's Merger Machine

PeopleSoft's (PSFT Quote) unexpectedly strong second-quarter showing won't stop Oracle's (ORCL Quote) hostile takeover attempt. But it will make the buyout more expensive, and adds yet another layer to PeopleSoft's already formidable defenses.

Analyst David Hilal of Friedman, Billings, Ramsey & Co., Inc. called the upside surprise "another blow to Oracle," and said, "This will make it that much harder for Oracle to convince PeopleSoft shareholders that they should tender their shares."

After all, a large part of Oracle's pitch to shareholders is that PeopleSoft needs to be rescued from a management team that led the company to a run of bad quarters. ...