Updated from 1:49 p.m. EDT

Oracle ( ORCL) again moved to mollify PeopleSoft ( PSFT) shareholders and customers on Tuesday, making two new concessions aimed at easing the path to a takeover.

But PeopleSoft management quickly rejected the overture, saying in a prepared statement, "Oracle is blowing smoke -- again."

Equally, if less colorfully, unimpressed, was Connecticut Attorney General Richard Blumenthal, who filed an anti-trust suit against Oracle on June 18. "Ellison seems to have retreated, but we have yet to be convinced that anything has changed," he said in an interview.

Blumenthal said he is encouraged by talks with other states aimed at broadening the attack on Oracle, but would not disclose any details about how many states were involved and what, if any, additional actions might be taken.

In effect, Oracle offered on Tuesday to ignore the fact that PeopleSoft management had upped its friendly offer to buy J.D. Edwards. "Removing the waiver means nothing when Oracle still has pending litigation in Delaware that opposes the PeopleSoft/J.D. Edwards transaction," PeopleSoft responded.

The waiver refers to a clause contained in Oracle's sweetened offer to PeopleSoft, demanding that PeopleSoft not up its offer for J.D. Edwards. But PeopleSoft raised its offer for J.D. Edwards to $1.75 billion from $1.7 billion last week, and also boosted the cash component of the deal.

Oracle's original offer for PeopleSoft was valued at $16 a share; the bid now stands at $19.50 a share, or $6.3 billion.

Oracle CEO Larry Ellison softened his stance about the future of PeopleSoft's business software should the merger actually happen. "We will not actively advertise PeopleSoft products , but we will sell it to whomever wants to buy them," said Ellison, speaking at an Oracle event in London.

His statement is something of a departure because Oracle said earlier that it does not expect to sell or develop new PeopleSoft products, although it would support existing customers.

That position has angered customers, fearful that their expensive investments in business software are threatened.

Ellison made other customer-oriented concessions last week, but Oracle still says it will not release significant upgrades of existing PeopleSoft products.

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