With two well-timed moves, Oracle ( ORCL) CEO Larry Ellison has taken the wind out of PeopleSoft's ( PSFT) sails and proved that his attempt to buy the rival software maker is deadly serious. "The pundits who said Ellison was simply out to disrupt PeopleSoft's business were wrong," said Ken Marlin, head of Marlin and Associates, a mergers and acquisitions firm. "M&A strategy is all about putting the ball in the other guy's court and he's done that." Maybe so. But a surprise announcement on Wednesday that the state of Connecticut will file a lawsuit to block the hostile takeover complicates the bitter battle even more. Early Wednesday afternoon, the PeopleSoft board said it would meet again to consider Oracle's new offer. Oracle announced Wednesday morning that it has increased its hostile takeover offer of PeopleSoft to $19.50 a share, in an all-cash deal valuing the company at $6.3 billion. Ellison raised the offer from $16 a share after a series of meetings with major PeopleSoft shareholders. "Many of those shareholders indicated the prices at which they would tender their shares. Therefore, Oracle is raising its all-cash offer to $19.50 per share. Oracle remains committed to acquiring PeopleSoft and will not be deterred by management's maneuvers to maintain control of a company they do not own," he said. The increased offer and the state lawsuit are the latest salvos in a fast and furious volley since Oracle first launched a $5.1 billion hostile takeover bid on June 6. PeopleSoft filed suit against the database maker, saying the takeover offer was a sham mainly meant to disrupt PeopleSoft's business and its own acquisition of J.D. Edwards ( JDEC) Oracle also announced on Wednesday that it was filing a countersuit in Delaware against PeopleSoft, its board and J.D. Edwards "in response to their collective efforts to eliminate PeopleSoft shareholders' ability to accept Oracle's tender offer." Oracle said PeopleSoft is failing to act in the interest of its shareholders in aiming to block the Oracle bid.