A controversial license-fee refund program adopted by
hostile buyout offer reportedly could cause Oracle to walk away from its $7.3 billion bid.
Oracle made a filing with the Delaware Chancery Court Monday saying that if an injunction isn't issued blocking the software-licensing refund policy, it might be forced to drop the buyout offer,
The Wall Street Journal
has reported that the refunds -- in which customers are promised between two and five times their money back on software purchases in the event Oracle prevails -- have been instrumental in preventing client defections from Peoplesoft since the buyout offer was first announced this summer.
As reported Friday, a group of angry PeopleSoft shareholders filed suit against the company over the guarantees, which the company calls a "customer assurance program," arguing it is a "nonredeemable poison pill" that can't be rescinded if the hostile bids wins out.
Oracle, which is offering $19.50 a share cash for PeopleSoft, said in the filing Monday: "If the PeopleSoft board is permitted to continue to issue self-serving, entrenchment-motivated contracts under the revised money-back offer, Oracle may be forced to abandon its bid as it will no longer be economically viable."
Oracle was recently up 24 cents, or 2%, to $12.81 on the Instinet premarket session. PeopleSoft closed Monday at $22.05.