PeopleSoft Says Feds Oppose Oracle Bid

PeopleSoft says the Justice Department says antitrust officials want to block the deal.
By TSC Staff ,

There's another plot twist in the takeover battle between

Oracle

(ORCL) - Get Report

and

PeopleSoft

(PSFT)

.

PeopleSoft late Tuesday said it had been informed by the Justice Department that its antitrust unit was prepared to block Oracle's hostile $9.4 billion bid.

The company said the DOJ's antitrust unit recommended the government "file suit to block Oracle's proposed acquisition," and that the recommendation has been submitted to the office of the Assistant Attorney General. PeopleSoft also said it was told to expect a decision no later than March 2, 2004.

PeopleSoft shares were down 24 cents, or 1.1%, to $21.45, while Oracle's gained 14 cents, or 1%, to $13.53 in premarket trading.

In a separate statement, Oracle said: "While no decision has yet been made, Oracle believes this merger will eventually be approved."

The company also said PeopleSoft's CEO Craig Conway had undertaken a "long and intensive lobbying effort aimed at persuading the antitrust division of the U.S. Department of Justice to block the deal." Oracle added, "PeopleSoft's lobbying resulted in complicating and prolonging the Justice Department review of the merger."

Oracle recently raised its offer price to $26 per share, which PeopleSoft rejected, its second sweetened offer since first offering $16 a share last June.

PeopleSoft has been resisting Oracle's hostile takeover from the start and instead acquired J.D. Edwards last year.

Oracle's offer expires at midnight EST Friday, March 12.

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